An Aussie Boomer says he had to eat “cheap mince” and never went on holiday to afford to buy his first home.
Bruce Jackson became a homeowner in 1984 when he was 25 years old, buying a $60,000 house in Albury in southern NSW.
Speaking on SBS’s Insight episode on Boomers vs Millennials on Tuesday, Bruce revealed that he thinks his 23-year-old daughter had an easier time buying her first home than he did.
He moved to Albury from Sydney after he became a teacher, saying property was “a lot cheaper” there than in the city.
At the time he was earning $22,000 and, with interest rates at 13.5 per cent, he said around 43 per cent of his salary was going towards paying of his mortgage.
“You’d eat mince every night. And you wouldn’t eat the quality mince. You’d eat the cheap mince,” he told the program.
“I never went on holidays. Never bought a new car. I’ve got given a second-hand car at 17. It was a 17-year-old car then. I’ve still got it.
“Every spare cent went on paying off that mortgage.”
Did Boomers have it easier when buying their first home? alexandra.foster@news.com.au
Bruce said, at the time, he was living off about $100 a week. This is comparative to about $373 today, with $1 today only buying about 27 per cent of what it could in 1984.
Shortly after buying the home, Bruce got a girlfriend who moved into the property and started paying him rent, with the Boomer then renting out the third bedroom to a friend.
He also had a “side hustle” selling antique furniture on the weekends.
“Anything that I made from that went straight on that home loan. I tried to pay it off as soon as possible because the interest rates by 1990 had gone to 17.5 per cent. So they just kept going up and up and up,” he said.
He recently sold the home he bought for $60,000 for $550,000.
Bruce said his 23-year-old daughter bought her first home after living with him and not paying rent while working and going to TAFE.
After two years, she had saved up enough money for a house deposit and was given the go-ahead by a mortgage broker to start looking for a property.
“Just the other day she said, ‘I don’t know what everyone’s going on about, it really wasn’t that hard’,” Bruce said.
When asked if he thought it was easier for his daughter to enter the property market than it was for him, the Boomer noted that he appeared to have struggles that his daughter doesn’t.
“When I bought my house, I was never able to pay rates on time. I was never able to pay the electricity on time. I was always weeks over on electricity,” he said.
“Quite often I’d have to borrow money off other people to cover that and then pay them back as soon as I had anything spare.
“In fact, she’s just paid for a trip for me to go away.”
Bruce did note people nowadays had to save a lot more money to get a deposit together, but said there is also more help available now, such as the first homebuyers scheme and special offers for essential service workers and teachers.
However, not everyone can rely on support from their parents while they save to buy for a house deposit.
Xavier George is one of the many Millennials who feels frustrated with the current state of the housing market, telling Insight he feels like Boomers are partly to blame.
“I think that if we knew what we knew now, then things may have happened differently. But people didn’t buy homes, knowing that it would suddenly become this huge social problem,” he said.
“I think people were taking what was good financial advice. You know, you should park your money in homes because it appreciates well. You can rent it out.
“I think the actions of a part of society are not the same thing as the government who made certain policies and allowed certain things to happen. Who do know better and should have known better. I think they’re two different things.”
The 30-year-old, who has more than 30 per cent of his income going to rent and is also paying off a $100,000 HECS debt, feels like he has “done everything right” but it doesn’t matter.
“It’s like, you can do all the right things. You can go to uni and get your degree and you can get the specialist degree, and you can get promotions, and yada, yada. And it kind of just doesn’t matter almost,” he said.
“I’m earning more money now on paper than I used to. But I’m definitely not feeling like I earn more money. You know, the cost of life has just grown quicker than my income has.”
Xavier wants to be a homeowner and, when asked what he thinks it will take to get there, his response was very blunt.
“My parents dying, I think,” he said.
“You know, knock on wood. Sorry, mum. But that’s the windfall.
“I’m serious about that. That is actually the great tidemark of when a lot of people are going to be able to suddenly buy their own home.”
Another Millennial struggling to break into the property market is 30-year-old Ashley Swallow, with the freelance photographer saying she feels like she has a “time limit” on her goals.
“Owning a home, having a family is definitely something (my partner and I) want to do .. but we want a house before we do that,” she told the program.
“But it’s one of those things. It’s kind of held back at the moment because of financial situations.
“I don’t want to be having my first child at 35. I don’t mind if I buy a house at 35. But starting a family would be, ideally, sooner But then everything has to work out to be able to do that.”
University of Sydney economist Gareth Bryant, who also contributed to this Insight episode, told news.com.au that the problems facing Millennials wanting to buy their first home are very different from the ones faced by Boomers.
High interest rates, recession and wage stagnation were all very real challenges in the late 1980s and early 1990s when a lot of Boomers were getting into the property market.
“The increase in interest rates briefly saw mortgage repayments on new loans hit on average 30 per cent of income – a common measure of housing stress. That is now the norm, and not a temporary spike in costs,” Dr Bryant said.
“But we are talking about two very different problems. In the late 1980s and early 1990s it was an income problem of people being able to afford repayments. But because house prices were much lower, it wasn’t so much of a wealth problem.
“In the late 1990s house prices were around 2-3 times average incomes depending on where in Australia you were. Now that figure is 7-10 times, meaning the problem is having enough wealth to get into the property market in the first place.
“Many Millennials could actually make mortgage repayments, but struggle to get the deposit.”
A common Boomer saying is that young people don’t want to give up things like holidays, going out to dinner and “smashed avo on toast”, which is why they can’t afford a home.
But according to Dr Bryant, this is simply not true.
A recent survey of Millennials by the University of Sydney for the for the Australian Government’s Australian Housing and Urban Research Institute (AHURI) found that young people were doing “everything they could” to save for a deposit.
Despite taking on extra hours and second jobs, cutting back on discretionary spending, being willing to move to outer-suburban and regional areas, Dr Bryant said they “still found themselves going backwards due to increasing house prices and rising rents”.
“The smashed avo on toast cliche is most definitely a myth,” he said.
And it looks like Gen Z are going to have an even harder time breaking into the property market, with the rates of home ownership being in decline for the past two decades.
“Across Australia about 2/3rds of Baby Boomers had bought a house by their early 30s. For Millennials, it that figure has now dipped below 50 per cent for the first time,” Dr Bryant said.
He added that, at the rate things are going, it is likely many of Gen Z will be locked out of the housing market “for good”, resulting in a generation of lifetime renters.