“Home ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates. All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. (The two best investments were wedding rings.) For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come.

But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.”

~ Warren E Buffett – the world’s third richest person, even after giving billions to charity, applies some common sense thinking to the dream of home ownership in his entertaining yearly letter to his investors.

In Australia, we still have hugely overpriced houses, and banks willing to facilitate the common fantasy of owning a hugely expensive dream home with lifelong debt. It makes even less financial sense to own an overpriced home in Australia.