Is it really harder for the young to buy homes?
by Gareth E on 18/09/2022
Despite media reports, there is no direct comparison available between when boomers bought their first homes and how things are for today's young couples. That's because conditions both in the workplace and society are radically different to those of fifty years ago.
There is clearly a focus today on claiming that young people are locked out of the housing market. To what extent that is true and how it compares to boomers' experiences when they first bought homes needs careful examination.
Numerous articles appearing on high profile websites have pointed to the fact that the average age of first home buyers in Australia is now 36, whereas when boomers began house hunting it was low to mid twenties. High house prices have been blamed for this increase, but the issue just isn't that clear cut.
We became aware in the early 1990s that young people were no longer following the life path that boomers did. That is, get married, buy a home and start a family in their late teens to early twenties. Instead, young adults were delaying settling down in favour of having a good time.
Bars, eateries and discos had sprung up in huge numbers. Alfresco dining had become popular, whereas when I left school, it was almost non-existent. Licensed venues no longer closed at 10 PM. In Adelaide in the mid 'sixties it was 6 PM. Air travel and holiday destinations had become a lot cheaper and far more extensive. Fast food, electronic goods and a wide variety of designer clothing was for sale in vastly increased and extended shopping districts.
Aussie boomers didn't enjoy that lifestyle as young adults because it simply didn't exist. Had it done so we might have also done what later generations did - live for the day.
However, you cannot spend your money and save it both at the same time. Couples who marry at age 30 but haven't saved anything for a home certainly have an uphill climb on their hands. Especially so if a child comes along. House prices may be high, but this angle is complicated by the fact that wages are very much higher today than they were in the 1970s. Adjusted for inflation, today's school leavers and young adults earn roughly double what we did.
Then there's the fact that boomers married and when a child came along the wife usually quit work to become a full time mum. Feeding a family and paying off a home was a lot harder on one wage than two. There was no paid maternity leave in that era. In fact, when factories laid-off workers, it was usually married women who were the first to go. Their wages were deemed less important than the main bread-winner - the husband. Clearly, these factors are radically different to those of today, in which two-income families are the highly preferred norm.
Many of today's first home buyers seem to want properties they've seen on home renovation shows as the entry point. They don't understand that we started off small and with very basic homes. Often they were in outer suburbs that required considerable commuting. That was life and we put up with it.
There are plenty of home units for sale in Adelaide for $300,000 or less. First home buyers could purchase them in order to get into the market, but they don't want those dwellings. They might have to ultimately accept that the dynamics of Australia's housing market have changed and it's most unlikely to revert to how things were when boomers first started out.
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