Just about a week ago, my family moved from a flat we owned to a house we're renting. My mum had taken a loan to buy the house, and after 4 years of payments, the principal amount of the loan has barely decreased. I told my mum, "We're not using that flat anymore, and we have no plans of moving back into it anytime soon. So why don't you just sell it off and repay the loan, and keep the rest of the cash as your retirement fund."
I thought I made a sensible suggestion. It seemed to make little sense to be paying interest on a loan taken for something we didn't use. Yet, after hours of trying to convince my mum, she didn't want to sell that flat. Her reason was this- Owning property is 1) an investment, and 2) a status symbol.
The investment part of it didn't make much sense, since she would have to pay the interest on a loan, and the price of the flat may not keep up with inflation in consumed goods. I could easily convince my mum that keeping that flat wasn't a good way to invest her cash.
But it was the second reason that was more important to my mum. My parents had very humble beginnings, having to work full-time throughout the year with no properties to their names. After 20 years of hard work, steadily rising amongst the ranks from a typist's position to that of a manager in a company, my mum finally saved enough cash to buy a house, and then another. Having gone from not owning any property to owning a house outside the city, and a flat close to the city, apparently her status in her social circles rose. And selling that flat would chip away at that status.
This, I can't wrap my head around. There's absolutely no reason for people to be owning multiple houses. And yet, when we know of someone who owns several houses, people tend to think of them as being a successful person. They might have taken out loans, or been involved in some corrupt business, or cheated someone into selling property. All of that, for nothing- people can't use multiple houses.
This is especially bad when it happens in cities. Cities have limited space, and there are lots of people moving into cities for work. People need a place to stay. But thanks to property owners, people have to either pay lots of rent for space, or pay tons of cash to buy a place.
Think about it- a flat close to a city (I'm using Hyderabad for reference) would cost about INR 20 lakh. Even skilled workers probably make only INR 3-4 lakh per year. That means it takes 6 whole years of salary for someone to be able to buy a flat. For semi-skilled or unskilled workers, it would take a decade or two- that is, if they saved all of their income without spending any of it.
After all, a flat is just a little bit of empty space (construction doesn't cost much). It shouldn't cost years and years of hardwork for someone to own a little bit of empty space close to a city. Think of it in terms of resources- picture the amount of resources (say, rice and vegetables) that can be bought with an years worth of rent or a part of a flat's cost. The farmers and factory workers have had to exchange all those resources for that lump of empty space.
The best thing, for society, would be if people only owned one house/flat for themselves. Anyone who finds work in a city should be able to rent or buy a house/flat for a tiny cost. Owning multiple houses is bad for society- because- supply and demand. When people own more property than they need, they're simply hoarding valuable city space. That's bad. We should be deriding people for doing that. But we don't. For some reason that I cannot understand, we have decided to praise and respect people who hoard property. This has to stop.
So, the next time someone comes to you and says they bought a new house they don't need, think about what you should say to them:
"Well done. I respect you for your success."
or
"What's wrong with you? Why do you want to spend all that cash on something you don't need, something that someone else could really use? I'm appalled at your lack of consideration for others."
Because society isn't something separate from us. We build and shape society, through our thoughts, words, and deeds.
I thought I made a sensible suggestion. It seemed to make little sense to be paying interest on a loan taken for something we didn't use. Yet, after hours of trying to convince my mum, she didn't want to sell that flat. Her reason was this- Owning property is 1) an investment, and 2) a status symbol.
The investment part of it didn't make much sense, since she would have to pay the interest on a loan, and the price of the flat may not keep up with inflation in consumed goods. I could easily convince my mum that keeping that flat wasn't a good way to invest her cash.
But it was the second reason that was more important to my mum. My parents had very humble beginnings, having to work full-time throughout the year with no properties to their names. After 20 years of hard work, steadily rising amongst the ranks from a typist's position to that of a manager in a company, my mum finally saved enough cash to buy a house, and then another. Having gone from not owning any property to owning a house outside the city, and a flat close to the city, apparently her status in her social circles rose. And selling that flat would chip away at that status.
This, I can't wrap my head around. There's absolutely no reason for people to be owning multiple houses. And yet, when we know of someone who owns several houses, people tend to think of them as being a successful person. They might have taken out loans, or been involved in some corrupt business, or cheated someone into selling property. All of that, for nothing- people can't use multiple houses.
This is especially bad when it happens in cities. Cities have limited space, and there are lots of people moving into cities for work. People need a place to stay. But thanks to property owners, people have to either pay lots of rent for space, or pay tons of cash to buy a place.
Think about it- a flat close to a city (I'm using Hyderabad for reference) would cost about INR 20 lakh. Even skilled workers probably make only INR 3-4 lakh per year. That means it takes 6 whole years of salary for someone to be able to buy a flat. For semi-skilled or unskilled workers, it would take a decade or two- that is, if they saved all of their income without spending any of it.
After all, a flat is just a little bit of empty space (construction doesn't cost much). It shouldn't cost years and years of hardwork for someone to own a little bit of empty space close to a city. Think of it in terms of resources- picture the amount of resources (say, rice and vegetables) that can be bought with an years worth of rent or a part of a flat's cost. The farmers and factory workers have had to exchange all those resources for that lump of empty space.
The best thing, for society, would be if people only owned one house/flat for themselves. Anyone who finds work in a city should be able to rent or buy a house/flat for a tiny cost. Owning multiple houses is bad for society- because- supply and demand. When people own more property than they need, they're simply hoarding valuable city space. That's bad. We should be deriding people for doing that. But we don't. For some reason that I cannot understand, we have decided to praise and respect people who hoard property. This has to stop.
So, the next time someone comes to you and says they bought a new house they don't need, think about what you should say to them:
"Well done. I respect you for your success."
or
"What's wrong with you? Why do you want to spend all that cash on something you don't need, something that someone else could really use? I'm appalled at your lack of consideration for others."
Because society isn't something separate from us. We build and shape society, through our thoughts, words, and deeds.
