Buying your first home is not easy, Bernard Salt
Buying your first home is not easy, Bernard Salt, some of our younger generations, Gen X and Gen Y, seem to miss the humour of one of our best known demographers, Bernard Salt, who has now written two articles over the last couple of weeks suggesting firstly, that they might like to stop buying expensive avocado lunches and save for a home or even give up their overseas holidays and save instead for a house deposit! Like me, Bernard is a “baby-boomer”, one of the lucky who just drifted through life buying cheap properties and having a ball!
(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home)
While his recent articles should not be taken too seriously, or rather too literally, I do feel some annoyance at how hard the world is perceived to be to some of the younger generations trying to jump on the first step of the property ladder. It has never been an easy step to take, Buying your first home is not easy, and it can be annoying when we baby-boomers are reminded just how easy it was for us to get started.
Read more Bernard Salt article here: https://goo.gl/wGnqiK
My first home was bought in the UK. I was a 21 year-old teacher and the very small two-bedroom duplex I purchased was around eight times my annual income. I managed the deposit through working for the previous four years, sometimes up to 126 hours per week during all the long university breaks and saving by staying at home. On a couple of occasions, I did take lower paying jobs which offered me free accommodation and free meals in holiday destinations like France and the Channel Islands. While I didn’t save much on these jobs, I at least had the opportunity to explore and enjoy a different culture. Travel expenses were absolutely minimal as I hitch-hiked most of the time.
When I eventually moved in to my first home, I had most of the basics from presents from a large family. I had a bed, lounge suit and necessary kitchen-ware and linen. I made most of the ‘furniture’ from cheap melamine sheets and watched a black and white television gifted to me as most people were switching to colour. I did have an old car that was serviced by me with the help of a friend. I had to take on another evening part-time job to help make ends meet. The only time I could ever afford to eat-out was at family gatherings where usually, my parents were paying. Every couple of weeks, if the budget allowed, we may have had a bottle of wine. Eight years after buying the house, I had my first 10 day trip overseas.
This was a lifestyle very typical to all my friends, it did not seem ‘hard’ and it certainly was not unusual. The older generation thought, quite rightly, that we never had it so good.
In speaking to older Australians, including many European immigrants from the 50’s and 60’s, it seems their life was similar. Many tell stories of building their own first home with the help of friends and sleeping on mats on the floor until they could afford a proper bed.
I’m very glad the world has changed and our standard of living has improved immensely since the 1970’s but I do think Mr Salt, tongue in cheek or not, is putting out a very important message; it is not easy to get on to the property ladder buy it never has been! It does often take some sacrifice in current lifestyle and it does involve living on a tight budget …. and always has!
‘Affordability’ is always an issue after a period of cyclic growth. Buying your first home is not easy and never has been. The same stories emerge after every growth cycle. We had the same discussions in Sydney in 1989 and again in 2003 after the last two major growth cycles. After a few years, income increases, borrowing rates change and things become easier – affordability increases! If we make the necessary sacrifices and budget/lifestyle changes now, then there may be a good chance that advantage can be taken during the next phase of more-affordable housing. It will happen, it always does, just be ready for it and don’t expect to start off with everything that your older neighbours have; it’s taken them all their life to get to where they are!
If you want to know more about this or discuss buying new property investment, a great way to ‘save’ towards your own first home, contact: info@limepropertysolutions.com.au.
Interestingly, this percentage drop is slightly more than the house price drop of 2008 to 2009 at the height of the global financial crisis. It is the largest drop since the end of the last Sydney house price growth cycle of 1996 to 2003. For those with longer memories of the end of the last growth cycle in Sydney, it’s not a lot to be concerned about and in fact, is pretty much the expected outcome after such a long and large period of price growth.
