It's common for people to want to buy a property when they're about to hit 30. Not me, and here's why.
*It's extremely inflexible investment. I think one of my advantages to advance my career is that I'm flexible. The more flexible I am, the better my career and earning potential. Having to worry about a paying off a house and being in a fixed location would be bad for my career.
* The Economist has explained that houses in Australia are overvalued. I read the article, and it makes sense to me. Logically I can't bring myself to buy something so overvalued.
* People on average spend 7x their annual income on a house. That's so much money it's not funny. Working for 7 years to buy a material good isn't my idea of fun.
* I'm a snob and unless I can own a piece of land in Sydney's inner west, I'm not interested.
* I think government policies that fiddle with housing demand and supply are ridiculous, I understand that the home owners grant simply makes people bid up the price of houses. This only benefits the seller. I refuse to buy into that. Sadly, I think that the government will need to continue to create policies to inflate house prices. If the house prices go down, that government will surely be out.
* I actually don't think it's a good investment. The interest rate is 5.25% at the moment. I'm not convinced I can beat that, with a risk premium. People get excited about house prices doubling. But for the record, at interest rate 4%, it takes 17 years 8 months to double your money. At 5%, it's 14 years 5 months, 6% it's 11 years 11 months and 7% it takes 10 years and 7 months.
* I would find it personally negligent to make such a huge financial decision without appropriate information. Say I spend 2 hours trying to find a $100 dress. To spend $300,000 I'd need to spend the proportionate time or at least a huge chunk of personal time, that is, hours and hours. To get enough information to comfortably make this decision, I'd need to look at something like 50 properties, spending numerous hours doing so. I would not enjoy this. I suppose I could employ a property buyer.
The upside of buying property
* Tax avoidance because your principal place of residence is tax free, as opposed to interest. But I hate the tax system for the ability to avoid tax, so again, I don't buy into this. I haven't checked out the Henry tax reform details, but hope it stops this distortion in the system. This absence of tax might mean investment might go elsewhere and house prices could go down.
* You own your own thing, and can pretty much do what you want. But problematic neighbours could be an issue.
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