I don’t know how it is where you live, but over here the house prices are incredibly high. Today it was on the news: “It’s especially hard for people who are buying their first house.” I know my mother bought a house about 13 years ago. Right now, 2 of her neighbours have sold a similar house with a smaller garden for tripple that price. Amazing! It won’t her do any good when she wants to move somewhere else though. Other houses are just as expensive, she won’t gain anything by moving. The only way to profit from it is to sell the house and go live in a rental. The rent prices aren’t sky-rocketting. Well… not compared to the houses that are for sale anyway. It seems to me like a smart idea when you’re old to take the money and have fun with it in the last years of your life.
My girlfriend and I have just bought a house. It’s somewhat near my mother’s house, but smaller and also with a smaller garden. We paid twice the amount of money my mother paid for her house. I wish I had been able to buy a house 10 years ago… I did get a really good deal on my mortgage though: 4.7% interest for 30 years. Just two days after we signed the contract, the interest started climbing and at the moment it’s around 5.8%.
The big question now is: did I make the right choice? Has this deal been a good investment or will the price of houses drop in the near future? It can’t go on like this forever, can it? In another 10 years only the very rich can buy their first house as well as people who already own a house. Still, maybe it can go on forever. I know that when my mother bought her house, the prices were considered really high, too.
Will the house prices drop? Will it drop to below the price I’ve paid for it? I hope not. I will have made a really bad deal with my 30 years at 4.7%.
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