We bought our house 2 years ago for $715,000 NZD.
Auckland is a lovely place to live. It is also by far the most expensive city in New Zealand and one of the most expensive places in the world to buy a house, relative to income.
According to this story, an average house in Auckland will cost eight times the average household income, making it the seventh least affordable housing market of the 85 major markets ranked.
Our purchase price was higher than the median house price for Auckland houses at the time. (According to Stuff, the median house price in Auckland reached $637,000 NZD in March 2014.)
But still, our house is absolutely unremarkable. It is a smallish, single level, lockwood style built in the early 80′s. Wall to wall wood panelling. It sits in a suburb that is not even particularly central or trendy. A far cry from the desirable city fringe villas I have always lusted over.
The decision to buy it came after an exhausting round of open homes and internet house trawling. Rather than falling in love, it was more a case of ‘Sure, whatever, I could probably live here. Just don’t make me go to another open home.’
2 years later I have totally changed my mind about houses. More expensive is not always better, in fact, I reckon the opposite is true.
As a recovering property addict, here are the fabulous things about owning an average house:
- If you buy something well within budget then you have breathing room. There is not a gorilla of a mortgage on your back that ends up wiping out a large proportion of your monthly spend. This lack of pressure is massively comforting and means the difference between wage slavery and opening up other fruity life options.
- You can pay off a smaller mortgage MUCH faster. Less total interest to pay means you start accumulating equity more quickly. Towards the end of the loan the interest shrinks dramatically. (a note on this – if you want to pay big chunks off your mortgage – make sure you get a loan that allows for this. For example, divide it into fixed and floating parts and check with your lender on any early repayment fees.)
- A house with rough edges has character, it does not shriek in alarm when your 2 year old tears paint off the wall with sellotape, or rubs wet play dough into the carpet. It doesn’t present you with a high end bill for repainting the pool house. You can live in it, casually, like a human being.
- You literally stop seeing your house after 6 months. As long as it’s cosy, functional, mouse free and has a few decorating touches , then the fact that the laundry door doesn’t close properly, or the decor is a bit naff stops mattering . Likewise, It’s easy to become immune to details you once thought were impressive.
- Living in an unfashionable suburb is sort of freeing. You can relax and not wonder whether you should wear skinny jeans and wayfarer sunglasses to go and buy a bottle of milk from the shop. You can let your freak flag fly at the local guinea pig fanciers annual show . Living somewhere gentrified, ”up and coming” or busy projecting an image can end up being vaguely predictable, and wearying.
- Hardly anyone really truly gives a flying rats about what sort of house you live in. Maybe you entertain a lot, maybe you hardly ever have people over. Either way – friends love you because you light them a fire and feed them full of stew, not because you have a 3rd formal living room.
To put it bluntly, If anyone cares about how expensive your house is, then they are suffering from a sad delusion that a house is an accurate reflection of A) your financial worth and B) your inherent worth. both of which are outrageously incorrect.
It’s time to unhinge so much energy and pride from where we live, and instead throw energy into how we live!
(I would also add – how we invest the potential money we’ve freed up – but that’s another post……..)