Your Home Isn’t an Investment; It’s a Hostage Situation
Homeowner or money-renter? Who’s really in control and is this whole thing a sham?
By Kanishka S. for Atlas October
Housing is a right, not a privilege. We broke it the moment we turned homes into speculative assets (“investments”) and kept pretending we didn’t as prices rocketed and affordability cratered. When the costs of shelter over our heads keep climbing while real incomes crawl, it’s time to confront some hard truths.
The alarm bells aren’t abstract: official price and income charts now look like two trains pulling apart on parallel tracks—one rocket-powered, the other pedal-powered. Whether in Canada’s big three metros or halfway around the world in Metro Manila, the cost of a roof has outpaced paycheques so relentlessly that “normal” feels increasingly like a punchline. Yet we still frame homeownership as a wealth hack, a rite of passage, even a moral obligation.
Time to strip off the romance. Below are six structural flaws baked into residential real estate—design features, not bugs—that quietly siphon cash, magnify risk, and lock owners in place. Consider these the hidden levers behind today’s affordability crisis; you’ll soon see the true toll they take on homeowners.
1. Acquisition & Transaction Barriers
The Commission Squeeze: Expect to hand over roughly 5% of your purchase price; then pay it again when you sell. That’s your hard-earned equity evaporating before you even move in or out.
The Paperwork Gauntlet: Home deals come with inspections, appraisals, title searches, lawyer fees, transfer taxes… each step tacks on new charges and delays.
The Waiting Game: Unlike stocks you can trade in seconds, real estate deals crawl along (sometimes taking months, if not years, to close) locking up your cash and your plans until every detail is ironed out.
2. Ongoing Ownership Costs & Asset Fragility
Never-Ending Expenses: Owning a home isn’t a one-and-done deal. Constant repairs, maintenance and surprise fixes suck your cash reserves dry. Every leaky pipe, creaky floorboard or broken window means another bill landing in your lap.
Fragile & Costly to Protect: Houses are vulnerable to storms, fires, pests and vandalism (bonus: each new risk drives your insurance premiums higher). When disaster strikes, you face both the repair tab and the next year’s steeper home insurance costs.
3. Liquidity, Mobility & Risk Concentration
Liquidity Trap: Your home is stuck in place; selling can drag on for months, with endless red tape and a tiny pool of buyers, so you can’t pivot when life demands it.
Local Risk Prison: Anchored to one neighborhood, your equity rides on local luck—one factory closure, crime spike, tax hike or natural disaster can vaporize your value overnight.
4. Low Returns & Unproductive Nature
Meager Gains: Home prices often barely keep pace with inflation, so your “paper” gains can evaporate once you move. Because most inflation measures ignore actual housing costs, you may feel wealthy… until you realize your “profit” won’t buy another place to live.
Zero Cashflow: Unlike stocks or bonds, a house generates no ongoing income—no dividends or interest—so you only see any return when you finally sell.
5. Debt and Borrowing (Leverage)
Magnified Risk: Buying a home usually means borrowing from a bank—small increases in value look great, but small drops can hurt badly.
Debt Spiral: Mortgages come with interest payments, meaning you pay extra over time and might even end up borrowing again, digging deeper into debt.
6. Taxation, Regulation & Ownership Insecurity
Tax Trap: You pay annual property taxes that rise with your home’s value and owe capital-gains tax on any profit when you sell; plus there’s no easy way to write off a loss like you can with stocks or bonds.
Regulatory Stranglehold: Zoning laws, permit fees, building codes and homeowners-association rules dictate when, how and even if you can renovate, rent out or sell; adding bureaucracy, delays and surprise costs at every turn.
I’d like to tip my hat to JL Collins, whose incisive essay “Why Your House Is a Terrible Investment” (March 2, 2023) first unpacked the hidden mechanics that turn homeownership into a wealth trap. His clear-eyed analysis on jlcollinsnh.com was the inspiration for my critique—so if you’re craving more of this, go read the original. Kudos to him for pulling back the curtain on real estate’s siren song.
We’ve turned shelter into speculation, and homeowners into hostages.
Housing should put roofs over heads, not debt over futures. Yet today’s property game feels like Monopoly rigged by your shady uncle: stacked with fees, drowning in paperwork, and leveraged with mortgages that seem more like mob loans. We’ve turned shelter into speculation, and homeowners into hostages.
If we truly see housing as a right, and not just a risky casino bet, we’ve got to strip down these broken parts: slash bloated transaction costs, untangle the red tape, deflate mortgage bubbles, and kick speculation off every city block. Maybe then we can finally break free of the invisible handcuffs of homeownership, turning houses back into homes; places to actually live in, instead of places that just bleed you dry.
Endnotes
JL Collins, “Why Your House Is a Terrible Investment,” March 2, 2023.
Toronto Regional Real Estate Board, Average Home Sale Prices (Toronto CMA), 2003–2023.
Canadian Real Estate Association, National Average Home Sale Prices, 2003–2023.
Statistics Canada, Median Household Income (Toronto CMA), 2003–2023.
Quebec Professional Association of Real Estate Brokers (Centris), Average Home Sale Prices (Montréal CMA), 2003–2023.
Statistics Canada, Median Household Income (Montréal CMA), 2003–2023.
Real Estate Board of Greater Vancouver, Average Home Sale Prices (Metro Vancouver), 2003–2023.
Statistics Canada, Median Household Income (Metro Vancouver), 2003–2023.
Canada Mortgage and Housing Corporation, Housing Market Report (Montréal single-detached home prices), 2005.
RE/MAX Canada and Canadian Real Estate Association, Market Snapshots (Metro Vancouver average prices), 2022–2023.
Philippine Statistics Authority, Family Income and Expenditure Survey, 2003, 2006, 2009, 2012, 2015, 2018, 2021.
Food for thought, as usual.
Maybe there’s already been a lot done on this, but serial landlords and housing speculators’ impacts on the housing crisis (it isn’t immigration) would also be a good essay topic.