I am amazed how day after day, investment analysts who are supposedly masters in economics and who represent what are supposedly credible financial institutions, keep on getting it wrong when it comes to analysing and commenting on the real situation with regards to an investment in a residential property.  With all their collective intellectual knowledge and pool of statistics available to them, they continue to publish the statistical historical facts and thereafter, their personal interpretation of the state of the property market and where it is headed to without regards to the real benefits of property ownership.

It is all such stereotypical commentary and analysis that contain untruths as all these so called monetary experts and investment advisors fall into the trap of not “comparing apples to apples” when analysing the benefits of acquiring a residential property to that of listed shares, commodities, cash, art, jewellery and my favourite, CFD’s which are merely casino styled “instruments of investment”.
My point is this – if I, on the advice of all these stereotyped investment analysts, am influenced to invest R 1, 50 million into shares, bonds and gold instead of purchasing a home for my family, then I have made a massive error in judgement by not understanding that life is not only about how much I am worth in rands and cents when I die, but rather about the quality of my life before I die.

It has to be a decision about priorities. Sure we all need to invest in our future by accumulating investment assets like shares, cash and commodities but our first priority should be to purchase a home for our families in order to create the right environment where each member of our family has a warm, secure, motivational and caring “place of their own” from which they can dream, plan, strategise and finally execute their aspirations in life. We all agree that our childhood days play an important role and in fact define us in how we are going to choose to act and to achieve in our later adult years. Also, we all know that the physical environment where kids grow up plays a massively important role in the quality of their childhood years. The irony here, in any case, is that individuals can make better investment decisions in other financial instruments once they have secured a comfortable, stress free and motivational environment in their very own home. They feel less pressured to make investment decisions as they would have satisfied the first basic item of survival which is shelter and a place of safety for themselves and their family.

So, if I fall for all these stereotypical market analysts who for the last four years have been shoving the lacklustre property investment performance down my throat and bought listed shares and fancy financial instruments from their employees instead of a home for my family they are all forgetting that an investment in a home for my family is an investment in an asset that I can use at the same time to improve the quality of my life and that of my families. It is an asset that I can enjoy. It provides me at the same time with a roof over my head, an environment in which to build up memories of my kids growing up, their pains and jubilations, memories of successes and failures, of love and heartache, of bonding and respect. It is an asset that can house my dog, my car and my valuables while at the same time it provides me with a social venue to meet and entertain friends and family.  I can even sleep in it and when I’m awake, I can sit in its comfort and watch all the sport and “soapies” that I want on the television. Most importantly, this investment provides for a safe haven for me and my family. It is an asset that gives me actual physical comfort as well as emotional comfort, and at the same time grows in value.

Please tell me investment analysts, how can I take a physical share certificate or an actual bar of gold and use it as a warm fireplace on those cold winter nights where we as a family can sit around and discuss the day’s events? I cannot as they are not multi-functional multi use investments.  All I can do with those is lock them away in a safe while they give me an emotional benefit but they will not keep the pouring rain from my head.

Sure the value of my home will go up and will go down but I know as a matter of fact that in the long run, it would act as a forced saving and I will be able to sell it and make some liquid cash. This cash, whether it is a profit or a loss as calculated by all the investment analysts, will be a substantial pile of cash to have when I sell it one day. In any case, the pile of cash is just going to be substantial bonus in my mind because the property’s real worth would have been how it improved the quality of my life as an individual and that of my family.

In conclusion, my message to all those investment analysts and market commentators employed by the revered financial institutions, before you recommend to your clients to invest in shares and CFD’s rather than in a home for themselves and their family, discuss the physical life improvement benefits they will enjoy during the actual time they are holding those investments that you are recommending. Also, the next time you compare the growth curve of your listed portfolio to a family home do not forget to subtract the cost of life from the growth figure of your listed portfolio. It’s time to start comparing apples with apples.

A home for your family remains the most important single investment you will ever make and it should be every person’s priority investment. It is an investment in your life and life’s real pleasures that no bank or financial institution or investment analyst can replace with a percentage growth numerical number. An investment in a family home is an investment where you can have the cake and eat it.

Harry Nicolaides

CEO Century 21 South Africa