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I’m booking flights at the moment. Suzie and I are heading to the South of England to visit my brother-in-law and family in a couple of weeks’ time. They’ve just recently hit a major life milestone by purchasing their first home together, and we’re looking forward to getting a tour by the proud owners. I’m very happy for them; I’m also very happy for myself because I’m getting free accommodation by staying with them.
My brother-in-law is in his mid-forties with a wife ten years younger and has expressed nervousness at taking on such a large debt at his age, although he accepts it’s in the long-term best interest for his family.
This got me thinking about property prices and the random nature of where we happen to rest our hat and set down roots to raise our families, and how it interacts with portfolio size and retirement outcomes.
In my brother-in-law’s case, the property is on the south coast of England, which is a very high-cost property area to purchase. Contrast this with my neck of the woods, where property prices are generally considerably lower, and you have an interesting financial interplay between property wealth and portfolio size and retirement planning.
My situation, living in an area with lower property prices, translated into a smaller mortgage and lower housing costs. This, in turn, freed up extra cash to invest into my portfolio and participate in market growth. It also offered the extra benefit of lowering my wealth concentration in more illiquid asset classes like property, ultimately enhancing my financial flexibility and retirement planning.
For my brother-in-law in a high-cost area, acquiring a home involved a larger mortgage and higher debt, meaning a significant portion of his income is committed to housing for many years. This financial commitment will reduce available cash for other investments, potentially slowing the growth of their portfolio. Consequently, a large percentage of their total wealth may become concentrated in a single, illiquid asset—their home—offering less portfolio diversification compared to a more varied financial investment strategy
Often, career opportunities, family ties, or personal preferences dictate where we live, and these decisions have profound financial consequences. It’s like many areas of life, a bit messy and a trade-off between lifestyle, community, and financial strategy. This shows that our decisions are more often than not driven by personal human factors over the cold face of finance, and I personally believe that’s just how it should be. Particularly when it gets me free accommodation!
Strangely enough I was thinking about you last night and wondering how everything was going with the business sale. A future article I hope!
Delayed by 2 weeks (yuck). I’ll write more when we get the whole deal over the line and my head is a little clearer.
Another great article, thanks Mark.
Just to broaden the discussion a little…..
If the US has seen house prices rise, Australia said “hold my beer”.
From an article in June 2025 (https://www.apimagazine.com.au/news/article/worsening-global-housing-affordability-crisis-presents-major-risks-to-australians)
“Australia’s current median multiple according to the recently released report is 9.7x, a figure that has more than tripled since the late 1980s. Housing in Australia is now twice as expensive as the US, and still significantly above the UK’s median multiple of 5.6x.”
Australia has been wrestling with high housing costs for a long time. There are a lot of Australian millionaires who have relatively low investable assets due to the very high proportion of their net worth tied up in the primary residence.
Property “wealth” and savings capacity for retirement are inextricably linked and I think it is shortsighted (let alone not very diverse) to overly favour one over the other. That said I also recognise that many people are prepared to play geographic or property size arbitrage until it is perhaps too late for them to enjoy any meaningful equity release from their property.
I still maintain as I’ve stated before here that for those in major cities a valid retirement plan is pay off the mortgage on the best property you can afford then retire to the countryside* releasing a lot of capital and probably gaining space.