Scapegoating Boomers over property prices is rubbish

by Gareth E on 07/09/2022   

Blaming and shaming baby boomers over exploding property prices is a lie and a dangerous one at that. It borders on anti-boomer hate speech.

The property price surge has made entry into the market difficult for some first home buyers. A flurry of articles on various media websites have blatantly pointed the finger at boomers as big winners, intimating that they are somehow responsible. However, boomers didn't cause the latest price rises.

The suggestion has no basis in fact. It's mostly a case of media businesses choosing sentiments to fit their preferred narrative and cherry-picking statistics to suit. News and entertainment media themselves largely caused the house price boom. In doing so they disadvantaged the demographic most preferred by major sponsors. That's the 18 to 30 year-olds, who happen to be potential first home buyers.

An article on one high profile real estate publication claimed that the recent surge could only be called a 'boomers' boom'. This was based on the stated fact that baby boomers are the single biggest residential property ownership demographic. However, boomers don't own the majority of Australian properties. They own around forty percent. So, wasn't it a boom for the owners of the remaining sixty percent? The hard truth is that this was a homeowners' boom. Demographics don't come into it.

Another article noted and appeared to suggest it's somewhat indecent for boomers to own over fifty percent of Australia's property wealth despite them making up just twenty-five percent of the population. Yet, how else it would be, considering that boomers have been property owners for the longest? (excluding their parents)

Should Gen Z own the same value of property head-for-head after 5 to 8 years of work as boomers own after working fifty years? Life doesn't work that way.

Yes, it's tough at the moment for young first home buyers to enter the market, though not as impossible as claims suggest. However, that difficulty in no way proves that their grandparents' generation are somehow culprits who caused the problem.

An article on the ABC website alleges 'intergenerational theft' is taking place. To me that's hysterical rhetoric. 'Theft' always implies deliberateness and I see no hint of that. In any case, the vast majority of boomers are passive bystanders in the event. Most who I know own modest homes in which they will live until they enter a care facility or die.

I know quite a few boomers who own no property whatsoever. These people are in the worst position because they don't have available to them the future possibilities of buying a home that the young will enjoy. However, most are just as impacted by rent increases.

From the many auctions I've recently attended, it clearly isn't boomers who are buying and flipping homes after giving them a glam makeover. Nor is it boomers who are bidding outrageous prices for eye-catching abodes, driven by an egotistical desire to see their friends and acquaintances turn green with envy. It's the young and ambitious who are doing these things. Such practices are clearly a strong driver of surging home values.

It's a common media trait to blame whatever their preferred demographic resents and avoid blaming what they do like. Younger generations eternally resent the wealth and power of older people. Boomers did the same in their own youth and so will the progeny of today's school leavers. Editors should be honest enough to resist pretending that this is just a baby boomer issue.

There are two major factors helping to fire up the current property boom which news media seem determined to defocus, if not neglect altogether.

One is TV shows. Home improvement programs have distorted people's view of home ownership. This was mentioned at length in the last property boom around seven years ago. Yet, it got no blame in the current one. That's undoubtedly because people enjoy these shows and they are money-spinners for various media formats.

When boomers started out in married life a home was a modest dwelling with a backyard in which you could raise your children, make your own rules and avoid paying a lifetime of rent. Sensationalist media reports and programs in the current era have fostered a belief that home ownership is a get rich quick scheme in which everyone is entitled to participate. Common sense ought to have told people that at some point that notion will hit a wall. The tone of news articles intonates that retired boomers have got rich quick while the young whose work helps to pay pensions have been shut out. None that I have read points out that boomers actually got rich at a painfully slow rate over many decades. Sudden price surges are anomalies.

The get rich quick mentality did hit a wall and the young are now suffering. So after talking-up a boom, media are now talking-up a price crash instead. That tempts the young to believe they'll be able to buy in and reap the profits of capital gain when prices go back up again.

What isn't being made clear to them is that if prices do collapse there'll be very little for sale, anyway. Banks will likely assist people to keep their homes because a flurry of mortgagee resales isn't in their best interests.

Photo from all-free-download.com