One small paragraph towards the end of a weekly column was all it took to ignite a fierce intergenerational debate about avocado, I mean housing. Are the Boomers hoarding the wealth and locking out Generation Y? Or is the current lousy generation more interested in their smashed avocado breakfasts and overseas holidays than working hard and saving for their first house like their parents did?
Bernard Salt wrote in “Moralisers, we need you!”:
I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.
The response measured in column inches and blog posts was huge. Gen Y writers didn’t take Salt’s savings advice lying down pointing out the economic differences between now and the olden days when smashed avocado breakfasts weren’t available. I’m assuming it was Generation Y who created this glorious breakfast. And doesn’t anyone else see the irony of Mr Salt discussing avocado consumption?
Anyway, the older camp came up with more facts, savings suggestions and an explanation of what Salt actually meant to say, while my favourite Generation X writer Greg Jericho produced his usual series of excellent graphs and charts to explain the situation. None about national avocado consumption I might add.
So if both sides have presented facts that support their argument, above and beyond Salt’s avocado savings plan, then who is right?
Lies, damned lies and statistics
The argument over Gen Y’s access to the housing market has been going on for ages. Certainly since I can remember back in the early 2000s, when Australia’s property boom began in earnest. The smashed avocado debate is really the current manifestation of what Baby Boomers have been saying about their children’s spending habits for a long time. The trouble is that while presenting a ton of statistics to prove their point, both sides miss the social and psychological aspects of the debate.
Baby Boomers suggest that if Gen Y just applied the same work ethic and commitment to buying a house as they did when they were young everything would be peachy. The point the Baby Boomers miss is that we live in a vastly different world to that of their generation. David Willetts sums in up perfectly in “The Pinch: How the Baby Boomers took their children’s future and why they should give it back” when he says that while we think of modern life as being fast and urgent, we are moving through the life stages much slower. Which means that where it matters, modern life is very slow. He asserts that while the current generations aspirations may be the same as those of previous generations, we are finding it more difficult to achieve the big things in life. I would suggest that this is because we lack the stability of previous generations.
Marriage is delayed. The average age is 29 for women and 31 for men. Which coincides perfectly with the time that math says is the perfect time to get married. Apart from a big party and debt, marriage offers many benefits including stability. Being married provides some confidence that the relationship will last, offering a good platform off which to make big decisions. Like buying a house, which is also easier on two incomes. As a bonus, marriage is an economic partnership that can really pay off, as married couples generally have a higher net worth than other family units.
For better or for worse, society has shifted away from marrying young and one of the consequences is that other major life decisions are also delayed.
The world is a more open, accessible place than it used to be. It also means our society is less homogenous and the choices about how we live our lives are not based as strongly on social expectations. There are many ways to ‘do’ life. We have the option to discover where we fit in the world through travel, connecting with others outside our communities and engaging with the world through the internet. We are presented with virtually limitless possibilities and I believe very few parents would encourage their children to abandon these growth possibilities in favour of settling down.
At the same time, the job market requires flexibility and being multi-skilled in order to survive. Jobs are far less secure and the idea of a job for life is virtually non-existent even in so called safe industries. Young people are often criticised for lacking commitment to their employers, with the suggestion that Millennials job hop voluntarily. I have no doubt that this happens, but in many cases it’s a chicken and an egg issue.
Contract work is more and more common statistically speaking and is born out anecdotally amongst friends and acquaintances. In all the businesses I’ve worked for, staff have come and gone not through a desire to move to greener pastures but because they were let go when there was no more work in the pipeline. This is just business as usual. You can’t retain staff when there is no work. But you also can’t suggest that it’s Gen Y who are driving the trend through a lack of commitment.
The price Gen Y pay is through a lack of financial security. Without job security, making a 30 year financial commitment to a bank can feel pretty daunting when you’re on a 1 year contract.
Attitude is everything
Since starting to come of age in the early 2000s, my generation have constantly heard how expensive housing is. That it’s out of reach for us at 6-8 times the average salary. For us, the Australian Dream is said to be over. And many have bought into it. Case closed, let’s go commiserate over a smashed avocado brunch.
But wait, it isn’t impossible for Generation Y to buy a house. At least 30% of us have done it and there’s always a Triple J Hack listener who doesn’t understand what all the fuss is about given they’ve just bought a house on apprentice wages. Bless ‘em! So what’s going on here?
Well, in some cases, attitude is everything. Charles R. Swindoll, author of The Grace Awakening, writes this about attitude,
“The longer I live, the more I realize the impact of attitude on life. Attitude is more important than the past, than education, money, circumstances, failures and successes and much more than what other people think, say or do.”
If you believe there is no way you’ll ever be able to afford a house, how do you expect to be able to afford a house? I’d rate the chances as pretty low.
It’s not to say that there aren’t many things standing in the way of home ownership particularly in places like Sydney. There are, both economic and social, but actions are born out of beliefs. And if you believe the Australian Dream is out of reach, then it probably is.
As I’ve said before, it’s not about foregoing coffee or smashed avocado brunches per say, it’s about the priorities that underpin those choices.
It’s interesting how people of a similar age, in the same job, earning the same amount of money can have a completely different take on their ability to get into the property market. Some will tell you it is impossible, while others have already bought a house or unit, or plan to do so in the near future.
Of course, there are situational differences. It’s not that everyone is under a false belief that they can’t buy a house. Not all Gen Y’s spend all their money on breakfast either. Some life situations make it difficult or even impossible. But I would challenge most people to take a good look at their situation and really test if their assumptions are correct. You might find that what you’ve heard actually doesn’t apply. It may very well be your beliefs that are holding you back, not the price of real estate.
Where do you stand on this generational debate? Do you think there’s a tastier breakfast than smashed avocado?