Why buy when you get higher return from stock investments, you have to pay interest, you don't receive dividends, you have to pay stamp duty, legal fees, owners insurance, maintenance, property tax and you have 1 large single investment without diversification to mitigate risks? What happens if house prices drop 50? What happens if interest hits 15%? What happens if you have to move to a different city or even country due to changes in your job?
You seem to be conveniently missing the fact that people have got to have somewhere to live! The biggest monthly cost for most people is housing, why would you want this cost eating into your pension fund/investments when you finally retire?
I'm paying off a mortgage that will eventually end and I will own a property. It's costing me considerably less than it would to rent a similar property around here even with maintenance and owners insurance. I'd say that's a rather excellent investment.
Let's just go through your post one by one.
"you have to pay interest" Yes you do have to pay interest, but I am also paying a not insignificant amount off the mortgage every month too. What are you paying off whilst renting? Oh wait, that's right, somebody elses mortgage!
"You don't receive dividends" No I don't receive dividends, but I do have a roof over my head!
"You have to pay stamp duty/legal fees" Yes you do unfortunately (depending on the purchase price), but that's bulked into the mortgage and the cost will be paid off within a few months. You're then onto paying off the rest of your mortgage and not somebody elses!
"Owners insurance" Renters still have to pay contents insurance, admittedly it will be a little cheaper, but mine doesn't cost the earth (less than £25 a month for decent cover)
"Property tax" Not something the majority of people will be paying unless they're going to be renting the property out and we're not talking about that in this thread.
"1 large single investment without diversification to mitigate risks" Now this would be fair enough especially if it was a short term investment, but housing isn't generally looked at by most people as a risky, short term investment, rather a necessity to keep their family dry and warm. You'd be very, very unlucky to lose money on property if you're in it for the long run.
Then there's your "What ifs?" houses drop 50%? Unlikely, but providing you're in it for the long term you should be fine as they'll more than likely recover and then some. Interest rates rise to 15%? Even more unlikely, most financial analysts have said that they'd be very surprised if it gets anywhere near 10% again let alone 15%. Howard Archer, chief UK economist at IHS Global Insight has said recently that interest rates should stay the same historic low for 2017 and probably the whole of 2018 too.
And finally if you're going to be moving city/country for a new job then that job has to be worth it financially to take it? However there could still be options for you, ie renting the property out.
