“Over at York University’s Schulich School of Business, finance prof Moshe Milevsky also believes that too much is sometimes made of owning a home.
“The way I look at it is, I tell people your house is a big fridge,” Milevsky says. “Are you romantically attached to your fridge? Do you plan to sell your fridge in 20 years and retire on it? No, it’s a fridge, you store things in there.
“It’s a place to live. We need it. You enjoy the benefits of it, backyard and so on, but it has to be done in perspective.” Milevsky feels there has been a serious rethink now, especially in light of the U.S. housing crash six years ago, over whether home ownership makes sense for a mobile workforce that has to deal with fluctuating property values.
“If you’re in your 20s or 30s, not sure what you’re going to be doing for a living, and your job is relatively risky, the last thing you want to do is pile on risk,” Milevsky suggests.
“But if you’re a 42-year-old teacher, have two kids, and your husband has a secure job for some government agency and you know you’ll be here for next 25 years, OK, maybe home ownership makes sense because your personal balance sheet is a lot safer, it’s a lot more secure.
“It has to be viewed as a portfolio transaction.”
– from ‘Should we stop encouraging home ownership?’, Mark Gollum, CBC News, 24 Sep 2012
From the comment section of the same article:
“Well, there is no way I’m ever going to take or listen to the advice of someone who equates home ownership with fridge ownership. My fridge is like a car: it wears out and I replace it. I make enhancements to my home, I better it, and its value rises. We are in a very sad state if the “experts” are advising that home ownership is not a good investment. The issue isn’t owning a home, it’s making sure you purchase a home that is affordable to you. Why these ongoing attempts to destroy the middle class?”
– keeper100, ibid
We agree completely with Moshe Milevsky’s comparison.
In coming years, Canadians (and especially Vancouverites) will learn to treat their homes more like fridges, and less like financial instruments.
The entire CBC article is worth the read. Some very sensible comments, as always, from Ben Rabidoux (“We’re asking taxpayers to basically take on the risk to allow people to jump into ownership with the risk being held by somebody else. And I’m not sure that’s sound policy.”)
Also, the poll on the same page is of interest. It currently shows 40% saying “home ownership is an important part of Canadian life”, vs 39% saying “home ownership is not a right. Renting is a fine alternative.”