In the last few years, I’ve entered a the age where is mandatory to think and speak about buying an apartment or an house. Same old questions arises: should I rent?, should I buy? where to buy? rate? interests? fixed rate? variable rate? bla bla bla bla
Everybody knows that Investment on houses is a long but secure investment. Everybody?
This idea has cultural origin, not only in South european countries like Italy, Spain, Greece, but also in middle and North European countries like Netherlands or Germany.
In Italy (but not only) there is a common pattern, called double M: Marriage-Mortgage. Young people, after living with the parents until the end of the University they move in with the partner, get married and buy a house within 1 or 2 years. Don’t forget that cohabiting, in Italy, is still considered blasphemy; imagine having the whole neighborhood looking at you as you were an Alien.
The pattern has a third component called Lavoro (Job) which was one and for the entire life. Today (fortunately?) things are changing, and there is no guarantee that your job will last forever.
In Netherlands, is quite more practical and pragmatic: is cheaper. Young people buy a house in the city thinking already to sell it in 30 years, when they will move out of the city. In Netherlands, young people move to the city much younger, and they start working most of the cases when they are already at the high school or university. Is also more frequent to have partner cohabiting without shame.
Summarizing, in general the main reasons for buying an house I’ve heard so far, are:
1. Houses always gain value
PARTIALLY TRUE. The idea is that the house market should increase at least on the infraction rate, true, but do you really think that the house value is fair? I think the value of houes is basically a fake. If you look at what happened in Spain, is clear that the normal market law is not follow: no matter the availability of the resource, the price is going up and down independently.
2. If you want to move, you can always sell your house
PARTIALLY FALSE. You cannot sell your house in the first 5 years without incur in a relevant loss. Now, think. 5 years, is such a long time, I cannot imagine how my life would be in such a far future.
In theory, you can always sell your house. How long are you willing to wait and how much money do you want to gain or loose. It might be take from 6 months to 2 years to sell it. What happens if you have a great career opportunity in another city? In another country?
3. Paying monthly mortgage is cheaper than a monthly rent (eg. 30 years interests)
TRUE. On the paper. The paper shows only the money part of the mortgage. Unfortunately this is the only part that people sees. The rest of the price you are paying: zero flexibility, additional burden on maintenance, external environment/city. It would be not easy to quantify those information and come out with a price value. Unfortunately those values are taken for granted until they became important. That’s why most people don’t consider them.
4. When you rent, you own nothing
PARTIALLY TRUE. When you rent, you don’t own the premises of course, but you don’t own the problems related to it: maintenance, neighbors, neighborhood, etc.
Summarizing, the points I want to make are:
- price and money are where the world is turning around. Are we sure the price we are paying is only in money?
- flexibility/mobility in jobs, travel and lodging is one of the most forgotten values we should consider in our equation
- young people should spend their energy trying to change the world, not setting down and dying in their habits
- And remember, permanent job positions are dead.
I’m back from my Holiday (yes, with H) in New Zealand, and realized that, one month was not enough. I had really good time and I’ve enjoyed the nature as never before. In three words:
Best Holiday Ever
I didn’t have the opportunity or the tools to write about my travel, I will add some post retroactively, and I will linked them here:
- Day #1, #2, #3: flying from Amsterdam to Paris, from Paris to Osaka and from Osaka to Auckland
- Day #3: Auckland
- Day #4: Moving in the South Island
- Day #5: Malborough and Nelson
- Day #6 #7 #8: Abel Tasman Track
The fifth day started before 7 am, without alarm, still pretty early for an holiday. We wanted to see everything everywhere but we had a tight schedule because we were supposed to be in Marahau, where the Abel Tasman coastal Track begins, already the next day.
We drove in direction Picton, on a meandering and narrow road, which, combined with my sportive driving style, contribute to make life harder for the passengers. Fortunately, we were stopping every 5 minutes to admire and take picture of the landscapes, so we didn’t risk to get sick.
Any photographer knows that morning and evening light are the best, however this landscape with mixed sea, mountain, grass, hills in such short distance, was simply stunning. Gorgeous mountains, with light green grass and trees whom their leafs that were beginning to become yellow (the autumn was just beginning).
The weather was composed by cloud patches alternating with sun, it was colorful and unpredictable. Taking a picture was a matter of seconds, and the good light was already gone. For example, I could not delete the picture below, beside the scratch near the sun, I find it anyway beautiful. I didn’t have enough time to properly reduce the shouter aperture. Few seconds after the sun went under the clouds and the landscape changes completely.
Hills were actually more populated than the cities: mainly cows, horses, sheep . I could not take picture of any of them, because they were so shy and scared: as soon as I was moving toward the fence, they were fleeing as I was going to eat them.
Most of the time nobody was around: you could drive for hours without meet and cross any car on the opposite direction. If you have the chance to meet a car going in your direction, they were likely to let you pass, no matter which car they were driving.
I can say, the South Island was like having found another Nirvana after living for few years in a so high dense country as Netherlands, where is almost impossible to move away from the human being constructions (no matter where you go, you’ll hear cars passing).
New Zealand is peaceful and relaxing as no land I’ve been visited so far, can be. The only sounds you hear were from the nature: wind, trees, birds, water and our breaths.
Once arrived to Picton (I didn’t show any picture because, frankly there is nothing to show, as most of the cities here, but I’ll come back on this subject later) we had breakfast, did some shopping, and we drove back to Nelson, with the idea of having lunch in Havelock, famous place where to eat green-lipped mussels.
In Havelock, under the shining sun, we ate mussels in a restaurant on the shore of the harbor. Mussels in white wine combined with a glass of white wine (I don’t remember if it was a pinot gris or something else): Delicious.
After lunch we continued our slow drive to Nelson. It took us quite a lot of time, because we were stopping time to time to take pictures and enjoy the nature.