Australian first-home buyers face 4.5 year savings wait to buy property

[dancitron]

I think some of the arguments older generations have is that it was actually harder to purchase a home. You needed 20% deposit (no 95% with LMI), no government grants, 17% interest rates at one point, often single income with Mum at home, plus they were out the door when they were 18-22 years old?

Please show me one major lender (non mezz) that will lend 95% to first home buyers post financial crisis ? I'd like to see that. My fiancee and I needed a 20% deposit just like previous generations, except as I said, for us it's 20% of a far higher capital value for a whole lot less property!

I also don't see the Government grant as any real assistance to be honest. As I said, because prices are now at 7-10x household income, the stamp duty (being percentage based) hits Gen Y more than twice as hard as previous generations. So after the grant, the stamp duty we pay went from "absolutely ridiculous" to just "hugely taxing" - aren't we a spoiled generation?

Fact:
Yes, I lived through the dreaded 17% mortgage rates, though the highest I paid was 16% (on an IP).

Rates at 17% would have been excruciating for certain. You should consider yourself lucky that:

a) That sort of dire economic enviornment is abnormal and was not sustained for a long period of time.

b) Because housing was affordable for you in the first place, you did not default. I can assure you that not even the most disciplined, robust savers in my "lazy" generation could sustain that sort of economic environment repeated, because housing is so much more unaffordable for us.

The "inner suburbs" you say your parents live in were the "outer suburbs" at that time.

I don't care how they were viewed at that time. I only care about proximity to the CBD and access to public transport as a measurement.

Your generation enjoyed 5-15 km radius living for much, much less than what it costs today. I don't care that you considered that to be "outer" at that time.

Our first VCR, a basic model, cost us $1,200. Yes, that is around 25-30 years ago so in today's values would be far higher. Other white goods were priced far higher than today's prices. We started our with a second hand fridge and a hired TV. In 1972 we paid $250 for a new Hoover twin tub washing machine.

And no cheap imports. Clothing was expensive - I would put a new dress on lay-by and pay it off over 5-6 weeks.

I don't know why this has become a debate about consumer products, but I will ask you this:

What did petrol cost you when you drove your first car? alot less than it costs me each week. What did chewing gum cost when you were growing up? Alot less than it costs me each week ($3.50 a pack? ouch!)

What did meat, milk, groceries and the like cost you growing up?

Heck, what did tobacco and alcohol cost you in your 20's? alot less than it costs now with all the extra tax (I don't drink or smoke.. part of the reason I could buy a property)

So please don't whinge that we had it easier.

We didn't.

So, as the saying goes, take a teaspoon of cement and harden up.

I am responding to the endless stereotyping of my generation as impatient, undisciplined, lazy sods who "have it easy". That, is total bollocks for all of the reasons I mentioned.

Dan C hit the nail on the head.

 

[Luv2Travel]

I am responding to the endless stereotyping of my generation as impatient, undisciplined, lazy sods who "have it easy".

Why are they called Gen Y? More like Gen PM.
(Poor Me)

 

[dancitron]

Why are they called Gen Y? More like Gen PM.
(Poor Me)

Couldn't answer my response to you Biggles? yeah, better sidestep it with an insult. You'd make a great politician!

 

[Luv2Travel]

Couldn't answer my response to you Biggles? yeah, better sidestep it with an insult. You'd make a great politician!

What's the point, you've made up your mind that you have it 10 times harder than Gen X, 20 times harder than baby boomers and 30 times harder than those who went through the great depression. I've stated all my points, as to why I think Gen Y has some things easier now, whilst other things are harder resulting in a change of difficulties but not overall more. Maybe banks are restricting their lending to 80% for the moment, I don't know, I'm not a FHB today, but it will probably be temporary. I borrowed on 10% about 10 years ago, and others have borrowed on 95%. Economic crisis at the moment has hit everyone, not just Gen Y, but of course they can't see outside their 'me me me' window.

 

[wylie]

Dancitron.... your view of things is warped by your your youth and your bias. We older folk also view things with a different bias. I am 50 and don't agree with your version of the 70s and 80s at all - and I lived through them and bought my first house back then too.

We all view things differently, even those of us who are the same age and who bought houses/whitegoods/chewing gum at the same time.

You sound bitter.

It certainly was not ever "easy" for my generation, nor my parents' generation to buy their first house. Heck my grandmother had a loo in the back yard which I remember very well. My mother slept with two sisters in a partially open sleepout. No four bedroom, three bathroom and a powder room for many back then. But that is considered "normal" now, for many of you younger ones.

You say you don't care that where we bought was considered outer suburbs, but you then go on to say you are not prepared to buy in an outer suburb yourself . Probably the same thing some of our generation said to their parents too. They also probably couldn't have given two hoots, just as you don't.

This snippet from you - (Note: Just purchased my first 2-bedroom unit in Carnegie, VIC with my fiancee after 7 years of frugal living/saving for $580,000 plus approx $17,000 in Stamp Duty after the FHOG. My parents bought their first 3-bedroom home with huge back yard and front yard, 3 streets away in 1983 for a whopping $65,000) - was particularly interesting because that is a pretty snazzy first home, and way more aspirational than my first home, or that of anyone I know. In 1983 I bought my first PPOR for $46K and sold it in 1986 for $56K, so what your parents were buying was not exactly a "cheapie".

I don't like to bag Gen Y or others but when you come out with such rubbish, you need to be set right. Your version of how hard we had it is just not right.

 

[D.T.]

Please show me one major lender (non mezz) that will lend 95% to first home buyers post financial crisis ? I'd like to see that. My fiancee and I needed a 20% deposit just like previous generations, except as I said, for us it's 20% of a far higher capital value for a whole lot less property!

Sure, Bankwest/ANZ. Gave you a bonus one for free

 

[atsim]

Dear dancitoc , whatever,i have submitted my experiences to you without reply , it seems you dont like the truth. Im not well educated as you , maybe thats why you wont reply to my low level of veiwpoint. Let me tell you ,in the mid 90's one could buy a house in coogee/sydney in case you dont know coogee for about $450-550,000.Now your looking at $1.5-2.5mil average. So do not tell me i had it easy. Suffice to say , i dont live where I GREW UP. This is reality boy

 

[AndrewT]

I'm a Gen Y and I have to say, I think alot peoples comments about our generation are true (spare a few of course). Obviously there is alot of stereotyping but I have a look at what alot of my friends are doing and they fit right in. Spending every spare cent they have on partying and consumerables, then at the end of the week they wonder where it all went? A few of these friends have expressed feelings about wanting to move into the city and buy a $500,000+ property, but another week/month/year goes bye and they still haven't put away a dime. We're the only one out of many friends that we know that actually have a property!

I don't think getting into the property market for anyone was ever easy, no matter what generation it was. Each generation faced different problems and issues. Everyone has to make sacrifices and that is something alot of our generation don't want to do. On weekends, instead of going out and partying I work 10 hour days, then I work my normal 5 days a week. Last financial year I only had 10-15 weekends off to make sure we kept our heads above water. Alot of people of our generation wouldn't do that because that takes away their time off. Funny thing is, I still manage to do house duties, renovate our house, study for TAFE exams and read up on property investing!

 

[atsim]

Hi andrew, young people like you and your partner are the ones that will enjoy a great life, due to your self inforced plan to manage your income in a responsible way .Beleive me i know people / friends who have always erned more money than me and are still living week to week. but iam now owning 4 propertys/ about to sell one , will pay down ppor and still have 2ip's for retirement. by the way im only 43 and only started at 28 once i woke up to my self. anyway i see it this way , you pay up front or pay later/ with interest.Cheers

 

[Plumber101]

I’m going to write this In all honesty and say **** anyone who does have the discipline to save buy property.
I have worked/known with a lot of losers in my time who have winged and bitched about how lucky I am to purchase a house at 18.
I was working my *** off from 16-18 to save my deposit living off nothing and only driving my car when the other person was supplying the fuel and only eating homemade meals.
(all other time riding my push bike)
Doing 100s of plumbing service jobs for patrons of my church for not much money.
Working nights detailing boats all while studying and doing an apprenticeship.
I am 20 now and reaping the rewards I am about to buy an IP and another IP by the end of the year.
It really grinds my gears about wingers who complain about the previous generation and how hard everything is.
It’s only hard because you think it’s hard when you start to think it’s easy and make plans to acquire the money and knowledge its turns to easy.

 

[RickF]

I can empathize to some degree with younger people's way of thinking.
I grew up in a very controlled house and when I finally was able to break free (finish school and go get a job/move out) I cut loose big time. It was time to party, party, party. I was definitely making up for lost time.
Luckily when I turned 25 I had a moment of clarity and realised that I was old or at least when I was 18 I thought 25 was old. I thought I would have been married with a house and settled down when in fact I was doing the exact same thing I had been doing when I was 18.
As it turned out my brother and I pooled resources and bought a 2bdr townhouse together as it seemed like a responsible thing to do. Didn't realise at the time that it was the second smartest thing I ever did. Smartest thing was to get married and grow a family, great source of motivation.
The main thing to do I believe is to buy where you can afford and when you have the right mindset to service your debt. Buying a property to me was forced savings and now I find it easy to save/invest.
It was scary buying that first property as I had never owed that much money to anyone before but it makes you accountable and forces you to be responsible which can only be a good thing.

 

[Intrinsic_Value]

I also don't see the Government grant as any real assistance to be honest. As I said, because prices are now at 7-10x household income, the stamp duty (being percentage based) hits Gen Y more than twice as hard as previous generations. So after the grant, the stamp duty we pay went from "absolutely ridiculous" to just "hugely taxing" - aren't we a spoiled generation?


I am responding to the endless stereotyping of my generation as impatient, undisciplined, lazy sods who "have it easy". That, is total bollocks for all of the reasons I mentioned.

Dan C hit the nail on the head.

You know the 'sad' thing, you just came to the party too late.
Others have come before and 'spent' the benefits.

The next 30 years are going to be very interesting and very different to the last 30 years.

Owners of the means of production will be ok as the world becomes a 'global village' and capital moves to where ever it is most welcome.

But i feel a bit sorry for the traditional wage worker, the 'we think, they sweat' traditional thought of west/east business practices maybe comming full circle.