Throwing Salt in home ownership wounds

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troyheadshotThe path to home ownership is more difficult than ever, and ordering smashed avocados at local cafes isn’t totally to blame, but Bernard Salt’s column in The Australian did have a point and some truth.

His controversial piece earlier this month, which has attracted major criticism from all corners, suggested that if young wannabe home owners stopped brunching on $22 smashed avocados at trendy cafes, they could improve their home ownership chances.

Truth is that figures suggest that even with strong savings plans, home ownership is close to impossible without help from parents or other sources.

Let me get this point out of the way first – I do truly believe it is harder for young people to buy a home today than it was for their parents 30 or 40 years ago.

But Salt’s point was that youngsters often don’t help their cause when they’re spotted spending money on what most would deem frivolous things.

So many ‘millennials’ bemoan the current state of the housing market, yet most will have the latest iPhone or Samsung phone, which can cost upwards of $1000.

And did you know that you can get emails, play Candy Crush and post photos of your cafe meals on Instagram using a phone that is more than half the cost of an iPhone?

Eating out is seen as the norm, not an occasional treat. Breakfasts, lunches, dinners – the cafe and restaurant market, including here in Penrith, is booming.

Holidays to Europe, the US, Fiji or Bali are regular occurrences, not once-in-a-lifetime experiences.

And then there’s the little things – our parents wouldn’t have dreamed of paying $4 for a bottle of something that comes out of the tap, or $5 for a coffee five times a week.

The blame is not totally on young people’s spending habits but it does play a role in the overall debate.

When our parents were saving to buy a house, times and life may have been simpler, but their thinking was also very different.

‘Millennials’ do indeed have a “want it now” attitude, which is not always such a bad thing.

There is nothing wrong with enthusiasm and confidence.

But that attitude needs to be matched by some reality.

And the reality is that you do need to cut down on spending to make home ownership dreams come true.

That could mean no Foxtel, no annual holidays and no cafe breakfasts.

It really all comes down to what you prioritise.

And that was, at the end of the day, Bernard Salt’s point in The Australian.

It wasn’t so much about smashed avocados for $22 as much as it was about what they represented.

Difficult as it may be to buy a home in Sydney at the moment, Salt’s opinion that young people are doing themselves no favours by wasting money has some merit.

You only have to go out on a weekend and take a look around the local shopping centre to see where plenty of discretionary income is being spent.

Individual circumstances will always play a part, but those who want to purchase a home but are struggling to do so need to ask themselves some hard questions.

A millionaire, after all, is made $10 at a time.

Consider this – a $600,000 home in Penrith technically requires a deposit of $120,000 (20 per cent). But in truth, you can find lenders who would accept a five per cent deposit ($30,000).

It may not be the recommended path, but it is a way in.

$30,000 isn’t church change, but it is a goal that can be chipped away at one dollar at a time.

There is without doubt people who would find it impossible to buy a home based on their current situation.

But there’s likely to be just as many people who could actually achieve their goal but would rather whinge and moan instead. Sometimes, that can be a lot easier than simply facing up to some home truths.

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