Don’t build a house of cards

just to a mortgagee but also to family and friends. Tales are told of people hitting up family and friends for a loan or a guarantee and finding other ways to bridge the deposit gap. These constitute a neck stuck out too far and liable for chopping: becoming obligated by borrowing from family and friends is often not a good idea; paying a 1 per cent interest-rate premium for being over 80 per cent LVR at the bank is expensive; high gearing rates are risky.

Is home ownership really worth these things? From a strict financial point of view, I doubt that home ownership is much better than renting and investing. I have seen a few studies over the years and it is a difficult calculation with many assumptions of future values. My conclusion is that there is likely to be little (if any) difference between renting and owning provided you have the discipline to invest.

Housing is not a one-way bet: in some areas, house prices have boomed but that is not the constant state of affairs. You are supposed to buy in gloom to sell in boom. Buying now seems the precise opposite of that: this is a time for patience rather than doing whatever it takes to get into a house.

On top of the state of some markets, interest rates are rising. Doing whatever it takes based on historically low interest rates does not seem a great idea.

All of these financial risks are one thing, but I am also concerned that the rush to buy has a lifestyle cost: it often seems that people are working ever longer hours to buy a house that they will have no time to enjoy.

‘‘Whatever it takes’’ (with all of its determination) is a good attitude for some things in business and in money. However, home ownership is a big investment decision which needs careful financial and lifestyle consideration. House prices can and do fall; interest rates do rise; family and friends who have lent money can get grumpy.

You can have a good life and be wealthy without owning a house: you need the discipline to save to grow your wealth, but with high house prices and rising interest rates, ownership is anything but a no-brainer.