After all, when you're paying off a large mortgage, you don't want to think that your property is declining in value.
But a house you live in isn't really an investment as such.
On the plus side, it gives you something to live in and stops you paying rent. It gives you more control over the cost of your housing.
Over time, you should pay off the debt so that you're left with a place you can live without any accommodation costs. In that sense, it's an investment.
But, on the flipside, it's not an investment in the true sense of the word because it's hard to really get any additional value out of the house you live in.
Prices might rise and you might become better off on paper because of the value of your house.
You might rent out a room or Airbnb it. But as long as you need somewhere to live, a house that's worth more money this year than it was last is not a big benefit. If you were to move, you'd have to buy another.
You could downsize, but you might find it's harder and more expensive than you expect.
Interest rates could rise and make the cost of holding the property more difficult.
Homeownership is an important plank in many people's financial lives because of the security it gives and the enforced savings aspect of paying a home loan.
Having a freehold house at retirement is a big factor in how comfortable your post-work years will be. But if you want to invest for returns, think about KiwiSaver or another investment vehicle.
The NZX50 racked up a 30 per cent return last year.
Don't feel rich just because you've got a more expensive roof over your head — unless you're willing to cash in and trade it for a tent.
Jeremy Tauri is an associate at Plus Chartered Accountants.
