COLUMN: Home ownership is more than a mortgage

COLUMN: Home ownership is more than a mortgage

Buying a home has always been something that I associate with becoming an adult.

I bought my first home more than 40 years ago and not a day goes by that I don’t recall the sense of growing up that it gave me to walk into “my house” and know that this was something I owned.

That speck of the planet was mine.

Well, mine and the bank’s.

And, OK, before you millennials roll your eyes and invoke the phrase “OK, Boomer”, I’ll acknowledge that in many ways home ownership just doesn’t make sense these days and, perhaps, never did.

It does, after all, tie up a significant amount of cash in an investment that, while historically stable, can experience some pretty wild fluctuations.

As an investment, home ownership is not particularly liquid, it’s highly leveraged (most people mortgage their future opportunities to visit Maui to get into a home), and it is not something that allows for diversification of your investments.

There’s also taxes, home maintenance, and the chance that your neighbour turns out to be Ted Bundy or Alice Kravitz.

I know the arguments.

But all that aside, there are still a lot of young people who look to owning a home as a sort of rite of passage; the putting down of roots as they saw their parents do — roots that gave the family a sense of place. It was a sense of stability that they enjoyed as they grew up in the family home.

Some of them have also seen that home ownership gave their parents an investment that, as property prices have gone through the roof in some areas, afforded them a level of wealth that they would never have seen had they simply rented their accommodations.

These are the young people for whom I am concerned.

The truth is that the same increases in the cost of residential properties that effectively made their parents millionaires will prevent these young people from ever owning a home.

Take Sooke as an example.

The recent assessment numbers show the average Sooke home at $517,000.

Assuming that one has managed to save the minimum down payment of five per cent (on the first $500,000, it’s 10 percent on everything beyond that), you’ll still have to have a household income of more than $105,000 to buy a home.

Consider that within the context of the average household income in Victoria being pegged at less than $60,000 and the situation is clear.

Most folks, particularly young folks, will not be buying a home — at least not unless you’re in the top percentile of wage earning population.

It’s a reality in which the full ramifications are still unknown.

What does it do to a generation when they are locked out of the ethos of a society that, for more than half a century at least, equated home ownership with success and stability?

One can imagine that the situation may feed into an inter-generational resentment and divide in which “OK, Boomer” becomes a justifiable mantra.

The truth is that we just don’t know what will happen.

Perhaps we’ll all adjust to the new reality.

The alternative is to wait upon our governments to recognize that something has gone very wrong and, as they did after the Second World War, come up with a plan to create a way for people to own a home.

Government leaders have apparently forgotten that strong communities are built by people who are invested, quite literally, in making where they live a better place. They seem to lack the will to adopt policies and programs that would put home ownership back in reach.

Frankly, I’m not optimistic that they’ll have an epiphany on the subject any time soon.

For the sake of my children and millions of others who dream of owning a home, I hope I’m wrong.

•••

Tim Collins is a Sooke News Mirror reporter. His email is tim.collins@sookenewsmirror.com.

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