Where should Gen Ys actually put their cash?

[Joseph41]

"While last week's federal budget offered some help for first-home buyers, for many millennials the dream of owning a home won't be a reality anytime soon."

A lot of us probably aren't considering buying a house yet, but this quote probably hits home for our age demographic. It's sourced directly from this article here.

What do you think? Is buying a house even feasible?

[tashhhaaa]

I've seen a lot of snarky comments from older generations saying ours should stop buying $5 coffees, $18 smashed avo, cut down on travel etc and just save. I think that's true to some degree -- everyone looking to get into the market should budget for essentials, going out etc, and save the rest

I think it's still feasible if you're willing to be realistic. First home buyers probably shouldn't aim for a detached house in an inner suburb since it's out of their price range, but there are lots of new, affordable homes in the outer suburbs

[heids]

My 30yo sister, on a truck driver's wage, bought and paid off a house within five years; I think it's entirely possible if you are actually careful with money.

I don't really understand buying those coffees/smashed avocados/heaps of travel/expensive clothing/etc., and then saying one doesn't have enough money. The occasional treat? Sure. A consistently more expensive lifestyle that doesn't actually improve your life? I don't get it.

To answer where I think Gen Ys - in Australia we're in the top 1% richest in the world - should put their cash: some of it at least to supporting those in other countries with infinitely less money, infinitely lower quality of life, and infinitely lower life expectancy.

You may or may not see how I was brought up.

[Hungry4Apples]

Invest in an industry super fund,

"From little things, big things grow"

[Quantum44]

I think clearly something has to be done about housing affordability. Taking into account inflation, the median house price to median income ratio has gone through the roof and only around 10% of buyers are first home buyers. Negative gearing and foreign investment is just plain unfair and unless y'all are happy to do a one hour commute (at least) to work each day, you should be angry. The government seems to be screwing over young people on multiple fronts.

[tashhhaaa]

oops realised I didn't actually answer the question

investment properties, industry super funds, stocks, start ups, whatever -- there are lots of ways for people to grow their savings but I don't have an answer for that one exactly since i was gonna say 'just get an investment property' but that's negative gearing which exacerbates the problem

I think clearly something has to be done about housing affordability. Taking into account inflation, the median house price to median income ratio has gone through the roof and only around 10% of buyers are first home buyers. Negative gearing and foreign investment is just plain unfair and unless y'all are happy to do a one hour commute (at least) to work each day, you should be angry. The government seems to be screwing over young people on multiple fronts.

that's what I neglected to mention (oops) when I said buy in the outer suburbs -- commute time. I live in the outer North and the commute to uni is a joke

Part of the problem is the Australian dream of owning a property on a big lot with a yard blah blah blah. This isn't a thing in a lot of cities eg. Hong Kong
You may have heard of the '20 minute city' thing -- reducing urban sprawl, creating a more compact city and creating 'mini CBDs' in outer Melbourne. That could work in the long term but there's deeply rooted cultural values in the way we see property that make innovative planning challenging

I'm extremely angry at the way this government is treating our generation -- like irresponsible degenerates rather than our nation's future. I (literally) didn't vote for this

[brenden]

I think clearly something has to be done about housing affordability. Taking into account inflation, the median house price to median income ratio has gone through the roof and only around 10% of buyers are first home buyers. Negative gearing and foreign investment is just plain unfair and unless y'all are happy to do a one hour commute (at least) to work each day, you should be angry. The government seems to be screwing over young people on multiple fronts.

Seriously good point. I haven't contributed to this thread yet (still planning on it outside of this post) but I think something like, really common to this issue is that a young person will look at housing prices and think "Oh, I could buy 60kms out of the City. I already live 40kms away, that's not so bad. I wonder why people think that housing is unaffordable?"

--- that's a line of thought I've personally had myself, and still have until I read your post lol. I'm never going to buy in the City because it's impossible, and I grew up in a suburb 50kms away from the CBD so for me, could I afford to buy in my suburb soon? No. It's already too expensive. But I could afford to buy even further away if I really wanted to.

Do I want to? No. Because the AN office is in the CBD and already the commute is an added pressure for me that takes away some sleep, some family time (in the future) and so on. It's not horrible, I barely think about it. But it would start to get really sucky if it increased.

Obviously all these studies are based around prices in inner-cities, and a natural response is just "well who cares?" but yeah, awesome post Quantum because like... It's all well and good to afford a place 70kms out of the City but really, should that be our only option? We might be able to "afford" that financially, but can a father who wants to be around his family and watch his kids grow up... can he afford to live 70kms away if most of his employment options are based around professional City-located jobs?

With smarter policy maybe we actually could reasonably aim for a suitable above within 50kms of the City lol. But right now,  it looks hard.

Thanks for your post, sparked a good train of thought for me

[Quantum44]

Seriously good point. I haven't contributed to this thread yet (still planning on it outside of this post) but I think something like, really common to this issue is that a young person will look at housing prices and think "Oh, I could buy 60kms out of the City. I already live 40kms away, that's not so bad. I wonder why people think that housing is unaffordable?"

--- that's a line of thought I've personally had myself, and still have until I read your post lol. I'm never going to buy in the City because it's impossible, and I grew up in a suburb 50kms away from the CBD so for me, could I afford to buy in my suburb soon? No. It's already too expensive. But I could afford to buy even further away if I really wanted to.

Do I want to? No. Because the AN office is in the CBD and already the commute is an added pressure for me that takes away some sleep, some family time (in the future) and so on. It's not horrible, I barely think about it. But it would start to get really sucky if it increased.

Obviously all these studies are based around prices in inner-cities, and a natural response is just "well who cares?" but yeah, awesome post Quantum because like... It's all well and good to afford a place 70kms out of the City but really, should that be our only option? We might be able to "afford" that financially, but can a father who wants to be around his family and watch his kids grow up... can he afford to live 70kms away if most of his employment options are based around professional City-located jobs?

With smarter policy maybe we actually could reasonably aim for a suitable above within 50kms of the City lol. But right now,  it looks hard.

Thanks for your post, sparked a good train of thought for me

Exactly. When you grow up you don't want to be spending 2 hours a day getting to work and back, sacrificing family and health, and the simple fact is that housing would be affordable if people didn't treat houses like a commodity or a way to offset tax. Older people always make us out to be narcissistic, unappreciative and lazy brunch-goers as if we are ruining this 'utopia' they have created but this is simply a biased and unfair generalisation. You can't argue with the fact that house prices have gone up disproportionately compared to inflation. Someone needs to stand up for young people and make sure we get a fair go in a world that is more competitive than ever.

[elysepopplewell]

I don't know how the market in Victoria is in comparison to NSW, but I'll give my Sydney perspective.

So I live in West Sydney, and there's a train line which goes all the way from 5 minutes away from my house, to the CBD. That train journey takes one and a half hours, but the frequency of the trains is 30 minutes. I'm more or less at the foot of the Blue Mountains, you go back much further and you begin you to ascend. So although my commute on the train is 3 hours daily, and my walking time to and from Uni/work in CBD is about 10 mins, and my driving time from home to the station is only five mins, so let's put that at 3 hours and 15 minutes of commute - the frequency of the trains means that I rarely finish Uni and hop on a train, often I'm waiting at the station (either side) for 25 minutes or so because my work/uni finishing time doesn't coordinate with the train time table. So some days: 4 hours of my life is dealing with a commute.

This would be fine if the trains weren't incredibly overcrowded. But usually on my peak hour trips (unavoidable), I'm standing for at least half an hour on the way back and can't do any work on my computer. Fortunately, I live at the end of the line, so in the morning I always get a seat (great time to be on ATAR Notes).

So, I've looked at places closer to the city! Even places to rent, just for now, just to fulfil curiosity. And I haven't even bothered looking anywhere that has within an hour commute, there's no point. I looked at places in the Hills District, which is about 25 minutes drive from my current house and uses the same train line as me. It means it's an hour to and from the city. Great, so my commute is cut by an hour - that's decent. I've looked at house prices, and they're about 40% more than what they are where I live, which is already not a very good market.

So, I've avoided the part of this discussion that talks about inflation and what not because I don't have a solution, just adding anecdote to commuting NOT being a solution. My commute is long, often packed, usually pretty depressing, and it actually gives me a lot of negative energy to be sitting like a sardine for 3 hours a day with everyone in dreary suits and smelly armpits. I get home, completely knackered, and that surprises me since three hours of my day is literally doing nothing - it's just not a good environment to be doing nothing in.

As for what we should do with our money: of all my "close" friends (maybe a group of 30), I only know one that actually lives a properly lavish lifestyle and then complains about house prices lol. I'm lucky enough to have 7 best friends, and everyone works at least two jobs, two work full time and the rest of us study, and for most of my friends the thought is kind of "I'm working hard now so when I want to buy a house, hopefully I have a shot at it, but I'm not actually looking at the market because that's depressing." I also have a lot of friends who left school for trades in Year 10 (this is really common in the area I'm in), and lots of them are starting to buy houses now (with loans of course), and I'm really happy for them. The narrative of not being able to afford houses somewhat ironically hits the University students the most, I think, because the full time wage for Uni students begins later in life, whereas my friends are finished their apprenticeships now and are on really impressive wages, and I'm only in my second year of Uni, working two jobs!

An hollaaa, I'm overseas and the cost of living here is really cheap in comparison, I think. But this has only really been made possible for me to do because I've worked minimum 10 hours a week (during school, more after school obvs) since I was 14. At the time, I wanted a job because I wanted something else to do, everyone was getting their first jobs, it's a fun time, etc. But now I'm thankful that I was getting a tight little $100 a week back then, because I didn't have anything else to spend it on really, so it's sat in my savings. And now I get to have an incredible experience, which I likely wouldn't have done if it weren't for having some savings to make me feel financially comfortable enough to take on this whole thing. Outside of my exchange though, now I have real life expenses to pay for that I didn't have when I was 14, so back then money was sitting in my savings for a while, whereas now my money is in a pretty fluid situation of coming in and then flying out lol.

[spectroscopy]

As someone who is very into the housing market and has done real estate economics at uni, it is looking like the housing market is about to turn. most big economists called the peak in jan-march and april was the first month of property price decline in sydney for the last 18 months (with declines in 5 capital cities). i cant speak too much about other regions but melbourne is definitely gonna see some easing soon in the apartment market in the city. there are so many new developments coming onto the market that an oversupply is on the way and you can already catch some steals in the cbd for 1-2 bedroom apartments if you are constantly looking. My brother in law tried to sell his apartment in a prime spot in southbank and he got 0 offers because "there is just so much on the market". most of this market right now is currently under development (LOL) but in a year or so when all this construction going in is complete, apartment prices in melbourne will be a fair bit lower and if the macro-economic trends continue -housing in general should be cheaper(especially with all the federal government rules and regulations now on investors and foreign buyers) i think the future is looking more bright than bleak personally in melbourne at least.
For a really long time the western suburbs in melbourne were ridiculously cheap where I live but suddenly investors have realised that you can get a house 20 minutes from the city on the westside for the price of a house thats 1 and a half hours from the city in the eastside. this is no longer the case though and that boat has sailed, but the outer western suburbs are still very very cheap compared to the east and north side and it is VERY easy to get to the city from over here. alot of people dont want to move here because of the bad reputation and crime but its not so bad

i just want to add though that i still think prices in sydney are absolutely fucked. in melbourne you can get a 2 bedroom 1 bath 1 car space apartment in a brand new building (built, not under development) smack dab in the CBD for less than $450,000. in Sydney that is literally beyond the wildest figments of anyones imagination. The prices there are absolutely ridiculous. thank god i live in melbourne. my thoughts go out to all the sydneysiders on atarnotes. good luck and there is always space down here.

[elysepopplewell]

my thoughts go out to all the sydneysiders on atarnotes. good luck and there is always space down here.

Thank you for your solidarity. Strength through unity.

[Shinkaze]

I'm gonna go against everyone here and say that some people actually choose not to buy a house?? I have a relative that chose not to buy a house (He didn't intend to have a family anyway and don't have a girlfriend and prefers to stay single) so he thinks that experience > materials and decided that he's gonna spend most of his money on travelling and other "experiences" rather than saving up for a house. He said he thinks it's great because apparently you can just call up the owner if anything breaks and you're not really responsible for the cost and you can choose to move anytime if you want (freedom?)

[elysepopplewell]

I'm gonna go against everyone here and say that some people actually choose not to buy a house?? I have a relative that chose not to buy a house (He didn't intend to have a family anyway and don't have a girlfriend and prefers to stay single) so he thinks that experience > materials and decided that he's gonna spend most of his money on travelling and other "experiences" rather than saving up for a house. He said he thinks it's great because apparently you can just call up the owner if anything breaks and you're not really responsible for the cost and you can choose to move anytime if you want (freedom?)

Hey! That's a narrative we don't hear too often. Good on him!

[Joseph41]

I buy coffee every single day (7Eleven), but for me it's an investment of sorts. I admittedly didn't drink coffee at all during VCE, but having coffee allows me to focus for longer - not due to the caffeine, but because I have something to do (drink the coffee) in those 5-10 second breaks.

I guess you could replace the coffee with a bunch of other beverages, but it isn't really the same for me. I'm sure there are lots of negative effects of it, too. I probably don't drink as much water as I should, now - and less than I used to. But I honestly don't think my grades etc. would be where they are if I didn't buy the coffee each day.

[heids]

*not directly on topic*

I'd argue that you can spend a lot of money without clearly "living luxuriously". It adds up when you:

- buy lunch rather than bring it
- regularly go to a hairdresser (or other beautician)
- heat and cool a house significantly rather than just taking the edge off and piling on clothing instead
- buy expensive cosmetics and clothing, or lots and lots of clothes that you only wear a few times
- eat out at fancy restaurants
- buy more expensive versions of anything (groceries, gadgets, whatever) when the generic brand version is as good
...and the list goes on.

Like, I'm not judging or saying these are bad or wrong, I'm just saying to be aware that they are not things you *need* and they absolutely add up. It's totally your call how important specific things are to you personally

I feel this way because of the couple of years I've lived in India; coming back here and seeing how rich Australia is has always shocked me profoundly haha.