[OC] Housing prices and salaries - Three immigration levels (2023-2024)

[u/Rauram99]

Notes:

I only included countries with >0.830 HDI >5 Millions population.

Net migration rates are a cumulative average for the last 5-10 years.

[u/Rexpelliarmus]

Doesn't really look like there's any correlation with immigration levels here.

[u/Tropink → u/Rexpelliarmus]

As an American, the fact that housing is more affordable here than in places like Poland and South Korea is absolutely insane. Just puts in context how good we had it before the past decade of housing price increases.

[u/Tankninja1 → u/Tropink]

Increase being somewhat relative. I would not have like to have been someone that bought a house in roughly 2005-2007 time frame. Think it took until that Covid bump in 2021-2022 to really bounce back and we’ve seen it level off. Guessing a lot of people are still technically underwater if you bought in the early 00s when accounting for money spent on interest and property taxes.

[u/shits-n-gigs → u/Tankninja1]

At least they own a house. 

[u/Tankninja1 → u/shits-n-gigs]

Financial literacy is important.

Most people don’t truly own a home outright for 30 years after they buy it. Plenty more are making mortgage payments all the way to their retirement and until the day they’re in the ground.

But at least they own a house even though it’s just a giant boat anchor on most people’s financials.

[u/shits-n-gigs → u/Tankninja1]

I'll just rent forever then, cheers

[u/the-code-father → u/Tankninja1]

Objectively a house has been one of the best investments you could possibly have made over the last several decades. No bank will let your average Joe 10x leverage themselves on almost any other investment. I’ve made more money just living in my house the past few years than I have made at my job, almost tripling the down payment on it.

Not to mention the fact that it just provides a tangible sense of stability in life. Barring some very exceptional circumstances, I know how much money it’ll cost me to live here for the next 20 years and a landlord can’t decide to kick me out.

[u/Tankninja1 → u/the-code-father]

One of the better ways of investing money, sure, but it’s not the best way. I’d probably only rank it 3 or 4.

Objectively the best way is any sort of tax advantaged account, especially if said account has employer match that is just an instant 50% return on your money. 401k and HSA’s are two that come to the top of my head.

2nd best way is a low cost index funds which have historically outperformed the housing market. Myself I know if I had dumped in my house downpayment at the bottom of the COVID drop and taken it out now, I would’ve had enough money to pay for the house in straight cash. Mind you that same period of the stock market going crazy was also the most movement we saw in the housing market for like 10-15 years.

Sure a landlord could decide to kick you out, but even in the most landlord friendly places that takes a few months.

And the benefit of renting is that you don’t have a house you need to sell so if you find a better paying job in a different city, or need to move for some other reason far easier to do if you rent then the months it takes to sell a home, plus most of the transaction costs come from selling a home rather than buying a home.

The whole point I’m making here is there are a lot more considerations you really should be making when it comes to buying a house. It’s really not this magic cure all that people seem to make it out to be. You’re not going to buy a house and just fix your costs into place for the next 30 years. I’d argue your month to month costs will become more volatile with a house than renting and if you don’t have your finances to a point where a $5k-$10k repair bill won’t drive you into ruinous debt, then renting is the far better option.