It’s been nearly a week since Bernard Salt put out his Gen-Y-rage-inducing piece for the Australian on how all millennials would be able to afford houses if they just gave up eating avocado on toast at cool cafes.
Twitter jibes aside, he’s inspired some pretty powerful response pieces from journos and commentators at Junkee, theGuardian and more. Even the cafes he was talking about got in on the action and started offering avocado specials.
Turns out, Salt doesn’t actually think that smashed avo brekkies are the problem at all. Speaking to 3AW yesterday, he said that “this is what middle aged people think when they are in those cafes – look at those young people, how can they afford that shouldn’t they be saving for a house?” And apparently, it’s not Gen Y being too focused on having a good time – it’s Melbourne’s status as a global city: “If Melbourne is a global city, then the housing market will become as difficult to get into as it is in London, Paris, Tokyo or New York.” His colleague at the Australian stoked the fire again on Tuesday too, but getting him to temper his previous comments with “Australia works better when everyone believes they have the opportunity to buy a house if they want to.”
All in all, it looks like he was just trying to stir the pot a little last weekend. But the fact that people took his comments seriously despite the tongue-in-cheek ‘middle aged moralisers’ headline really says something. The fact is, there are older people out there who think that it really is just a matter of young people giving up one or two enjoyable things in life. And the way that they (millennials, Gen Y, whatever you want to call them) dare to enjoy nice things conspicuously really gives Boomers the irrits.
It’s fair enough, in some ways – they see ‘young people these days’ at inner city cafes, down at entertainment precincts, at the shops, on their phones on public transport. What they don’t see is when the same people crawl back to the dilapidated share house they live in with four or five others. Or arriving at said location on a bike or PT because they’re trying to save the cost of a car. Or eating beans and ramen the rest of the week so they can actually have a social life that one night. It might also be fair to say that many of the conspicuous consumers that Boomers are whinging about aren’t the same people complaining about not being able to afford houses. Some people are just happy with renting and would rather have nice things and nice experiences than be bogged down with home ownership. But I digress.
Mr Salt isn’t the first person ever to make a public comment about why young people can’t afford homes. The advice to ‘buy where you can afford’ (even if it’s a three hour each way commute from work) and ‘get a good job that pays good money’ are relatively easy to deal with when you look at the stats on unemployment, underemployment, and how terriblelong commutes are for your health. It’s the aforementioned conspicuous stuff that’s hard to explain to older people who don’t get it.
Here’s how much of each of the common ‘luxuries’ you’d have to give up to afford a house deposit (not taking in to account wage growth vs inflation, or the fact that prices would continue to rise during this time.)
Median house price: $817,600 = 20% deposit ( $163,520)
(CoreLogic Home Value Index, 5 capital city aggregate, 30 September 2016).
Avocado on toast @ $22 = 7,432 (source: Bernard Salt, apparently)
New model smartphone @$1,000 = 163 (update your phone every two years instead of every month [!] and you could get your house deposit in under 15 years!)
Takeaway coffee @$4 = 40,880 (It takes about five minutes to make a coffee. And we know that you’re sitting in a coffee shop 24 hours a day drinking your coffees with no pee breaks or sleep. Just cut that out, and it will take you four and a half months.)
Flights to Thailand @$500 = 327 (or flying back and forth to Thailand [8 hours] non-stop with no breaks or turnaround time for nearly a year)
Takeaway lunch @$8 = 20,440 (That’s only lunch every day for 56 years)
Designer jeans @$200 = 817 (We know you’re just buying new jeans every day instead of doing laundry. Stick with the one pair instead and you’ll have saved for that house deposit in a little over two years)
Movie ticket @$18 = 9,084 (Never see a movie in a cinema again for the rest of your life)
Pints of domestic beer @ $7 = 23,360 (if you have a cheeky one every Friday after work, simply stop going to after work drinks for the next 486 years)
Beef burger @$10 = 16,352 (If you’re eating a burger for every meal, just stop eating, dummy! It’ll only take you 18 months to save that deposit)
Bottles of cleanskin wine @$4 = 40,880 (112 bottles a day and you’ll be saved up within a year)
OR 25-34 median income after tax and levies = $853
Just don’t eat any food, drink anything, live anywhere, pay any bills, get sick, enjoy yourself, go anywhere or do anything ever, and you’ll save up for that house deposit in under 4 years!
PS: A quick run-around of Gen Y staff in the Money101 office and found out that 40% own a home – just over the national average of 34% (and trending down). And most of the rest are saving hard for a deposit. If you’re keen to help your younger staff get on the same track, check out our units on financial goal setting for millennials.