The value of home

It’s hard watching the house prices falling, isn’t it?

We all know they are too high but we have all got so much on the line. Especially people like me who just managed to get into the market before it started falling. Sigh.

It seems unfair. For those of us who bought recently, we will not see the astronomical gains others have made on their homes, especially in the past decade when prices really started to outstrip inflation and the cost of maintenance, renovation and transaction fees.

Yet, as I scour the pages for the trends in my suburb – and recoil in horror to see the minus signs – I try to reassure myself that this is actually the way it should be.

Homes are not meant to make us rich, materially speaking at least. They are there to make us secure, warm, happy, connected: at home.

Real estate agents love to tell you that rising house prices are due to too much demand and too little supply. The reality is that it is due in large part to government subsidies to first-home buyers, that simply became subsidies to home vendors – they just jacked up their prices by the same amount as the grants. The federal government introduced the first-home owners grant to compensate for the GST when it started in 2000 and it has been politically impossible to axe the program that I prefer to call the “home vendor’s grant”.

Another reason for the high prices has been those “record low interest rates” that governments love to crow about. The lower they go, the more we borrow. The more we pay, the higher the prices. It stand to reason.

Housing only ever looks cheap in hindsight. Right now, the price of housing is falling gently and will probably stabilise and then rise gently over the decades.

And much as I wish that I was going to be one of the fortunate ones who made a motza buying and selling homes, I am not.

I’ll pay off my flat, hopefully. The garden will grow. I’ll improve the kitchen and bathroom over time. I’m painting it and it’s going to be colourful! Not everyone would like these colours but I am not planning to sell. It’s home and I am staying.

One reason I hope prices stay low for a long while is so that my daughter might eventually be able to buy her own home, too, somewhere nearby and not way out in the suburbs.

Do you agree? Write and tell me your views.

BRW

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