Smashing of keyboards was almost deafening in the wake of Australian columnist Bernard Salt’s jibe that millennials were unable to afford a house because they were spending so much on luxuries like eating out; namely, spending too much on the humble smashed avocado on toast. What the article and the reaction it has provoked actually speaks to is the amount of unhelpful noise around property buying in the media.
In a fairly frivolous column in The Australian last Saturday, columnist and social commentator Bernard Salt bemoaned the milk crate seats, hard to read menus, and loud music of ‘hipster cafes’.
Towards the end of the piece, he took a playful swipe at the hipster crowd, and younger people in general: “All of this is mere ephemera. It gets worse. I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more…Twenty-two dollars several times a week could go towards a deposit on a house.”
The obvious implication was that younger people are unable to afford a house because they are spending too much on things like dining out, rather than saving for a property.
Well, how the internet erupted.
The housing debate, especially between older and younger generations, is a hornet’s nest that needs only a nudge to explode.
Comments on social media were coming thick and fast attacking the price of property or the seeming unwillingness of young people to save. Angry tweets were flying. Cafés started offering discount smashed avo as a cheeky way to help customers put a bit more towards their house deposit. The debate was even mentioned in a Senate Estimates hearing.
Depending on your position (and apparently, age), housing is out of reach for young people because either: a) values are increasing at such a rate that younger buyers simply can’t keep up; or b) younger people don’t work hard enough to save for a deposit.
What this scenario actually shows is the amount of unhelpful noise in the media surrounding property, which can become especially deafening in the echo chamber of social media.
Coverage of the property market, particularly the intergenerational debate about property values, is more often than not intended to do only one thing: get a reaction which gets readers.
It’s easy to say that property is too expensive, or people aren’t willing to save for a deposit. But over simplifying the property market doesn’t really help people who actually want to buy property.
An unfortunate aspect of the current housing debate is the constant comparisons to years gone by, which both sides of the debate are guilty of invoking. The world has changed a lot since the baby boomers purchased their first property and it’s unhelpful to look at today’s market through the prism of the market 30 years ago.
However, it is easy to see why buyers can be discouraged with the constant coverage of increasing property value. Price growth in Sydney is often cited as evidence that property is almost beyond first home buyers. But it is misleading to consider only one market in the country. Or to consider that market as a single entity, when there are a number of fluctuations and trends within it. As we covered in last week’s blog, broad stroke analysis of the market doesn’t give buyers that much of an insight into how they can secure their ideal property.
The reality is that it is absolutely still possible to purchase property. And thanks to record low cash rates, it has never been easier to service a loan.
For example, National Property Buyers advocates in Melbourne secured the purchase of a two bedroom, fully renovated apartment in a boutique block in Brunswick, walking distance to trams, trains, and a plethora of cafes (all of whom serve smashed avocado). And the price? $458,000.
Or for something larger, what about the three bedroom family home in Greensborough, minutes to shopping and rail transport purchased for $605,000?
Or what about the three bedroom home on 600sqm in Redcliff, Queensland? Walking distance to new rail and the water front, the property was secured for $380,000.
There is a lot of negativity surrounding buying property at the moment but as is evident, buying quality property without breaking the bank is still possible.
Key to buyers successfully securing a property is first clearly establishing what they want to achieve with the property. Is it an owner occupier purchase or an investment?
Buyers then need to focus their search on the areas that best match their criteria, specifically their budget. This part of the property search can often be a stumbling block for buyers; more often than not they will burn out and waste too much time looking in areas that don’t properly match their budgets and criteria.
Investor buyers also have the advantage of buying where they can get the best value for money, which includes buying interstate.
Prospective investors don’t just have to buy in their home city. They can buy in another city that may provide more options for their budget. Markets in Brisbane and Adelaide are regularly cited as standout options for this reasons, with generally more affordable median prices and steady capital growth prospects.
Indeed, the rise of ‘rent-vesting’ is indicative of buyers who are working the market to their advantage: securing an investment property within their budget while still living in their preferred area.
Buying property will always require a level of sacrifice, whether that taking another job or foregoing some luxuries such as dining out. Ask any property buyer and they will have given up something. Equally, buyers don’t need to eat baked beans three times a day to buy a house; they can enjoy a few luxuries. In fact they should. Property buying should be a good experience, not a burden.
To ensure the process of securing a property is as smooth as possible, buyers should seek as much expert advice as possible. Expert insight and advice is invaluable to finding the best property.
And as a side note, if you’re paying $22 for smashed avocado on toast, you’re paying way too much. Alternatively, you can find a great recipe for smashed avo here.