Millennials choose: Smashed avo vs saving for a home

For years young Aussies have been portrayed as big spending, “smashed avo” eating, party animals with little interest in saving and buying a first home.

Now that image of young Australians as financially naïve, perhaps even irresponsible spenders focussed on experiences, travel and good eating has itself been smashed.

New research from Bankwest has revealed the stereotype is false, with most millennials (people born after about 1990), more than willing to give up luxuries and experiences to save for a first home.

The national survey from Bankwest showed millennials not only believed in the Great Australian Dream of home ownership but were willing to make big sacrifices to save for a deposit on a first home.

More than a quarter (27%) of young Australians said they would put off having children to save for a home. One-in-five (22%) said they were willing to even give up basic necessities to save for a home.

But the big reveal from this data is what millennials say about luxuries.

More than half (58%) of millennials surveyed would sacrifice little luxuries for a first home.  56% will cut out ‘experiences’

53% say they will do without ‘big-ticket items’ in order to save for a deposit.

28% of young Australians are willing to live with parents or family for longer to save money.

How much do I need to save for a first home deposit?

Young Australians are among the most committed people of all to the Great Australian Dream of owning their own home.

New research from Bankwest shows that millennials are defying the stereotypes, high property prices and cost-of-living pressures to be among the most likely to believe that  home ownership is achievable for them.

However, just 20% say they know exactly how much they need for a deposit on a first home.

Another 20% said they had made a savings plan but then failed to stick to it, according to Bankwest’s national survey of young people.

“These results are really promising,” said Bankwest’s Donna Dalby.

“This paints a very different picture of young Australians to the one we usually hear.

“This is not a bunch of carefree kids ignoring the future for an indulgent moment,” said Ms Dalby.

“This is a group of people who have financial goals they want to achieve and are willing to sacrifice.”

But many Australians still feel that home ownership is beyond their reach.

Research from the Housing Industry Association in 2018 showed that 92 per cent of renters aspire to own their own home but only 49 per cent believe they will achieve that dream.

“All Australians seek to have secure housing options,” said the HIA’s Kristen Brookfield.

“Home ownership is an important fundamental of achieving that.”

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First Home Loan Deposit Scheme working for millennials

Young people can be forgiven for thinking owning a home might be beyond them. Property prices alone can make owning a home seem out of reach for all but the luckiest of Aussies.

Don’t get discouraged by the big numbers. It is possible for young people today to save and buy a home in Australia.

“Home ownership may be a daunting prospect for some aspiring homeowners,” said Kristen Brookfield from the Housing Industry Association.

“But there are options available to those who are willing to make choices or trade-offs.

And in good news for millennials saving for a home, new data released yesterday shows that the government’s First Home Loan Deposit Scheme is working for young people.

“The Federal Government’s First Home Loan Deposit Scheme is already helping millennials achieve their home ownership aspirations and giving a boost to regional areas,” said Ms Brookfield.

“76 per cent of applicants are aged between 18 and 34, with millennials making up the largest share.

“This represents 3,055 first home buyers taking the opportunity to buy their first home sooner.”

“The Scheme is clearly helping,” said Ms Brookfield.

Millennials are looking outside of the inner city for first homes

And millennials are not wedded to the inner-city lifestyle with coffee shops, bookshops and night clubs either. Many first home buyers are choosing towns and regions for their first home.

New data released yesterday by the federal government sheds light on who is getting the benefits from the First Home Loan Deposit Scheme and where they are choosing to buy their first homes.

A large proportion of the scheme’s loan guarantees are being allocated to regional areas and not in the major capital cities, where house prices are highest.

“A large number of applicants, including millennials, are looking to buy outside the major cities of Sydney, Brisbane and Melbourne,” said Kristen Brookfield.

The FHLDS house price caps in regional areas are, on average around $400,000.

“The data shows most borrowers are seeking approval to buy houses below that maximum price,” said Ms Brookfield.

“Free standing houses are the most popular purchase with the scheme, which tends to suggest people are buying existing homes, rather than new homes.”

Find out more about how to apply for the First Home Loan Deposit Scheme home loan at InfoChoice and see a FULL LIST of FHLDS lenders.

Answers to some common FHLDS FAQs are also at InfoChoice.

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