BOOMERS SPOUT THE SAME ARGUMENTS OVER AND OVER. MOST OF THESE ARGUMENTS ARE NOT BACKED WITH FACTS OR DO NOT TAKE INTO ACCOUNT THE FULL PICTURE.

“Back in my day, interest rates were 18%”

The absolute worst and most narrow minded argument of them all.

Boomers often argue that buying a home in the 1980s and 1990s was just as hard due to high interest rates. While it is true that interest rates were high, peaking at around 18% in the late 1980s, this argument overlooks several key points. Firstly, the high-interest rates were only temporary, in less than 2 years they had returned to less than 8%. In contrast, current high house prices have persisted for much longer and show no signs of slowing down.

More importantly, even with high interest rates, the overall repayment burden was lower as a percentage of income. In the 1980s, the median house price was around 2-3 times the median annual household income. This meant that despite high interest rates, the total amount borrowed was lower, making repayments more manageable relative to income. Today, the median house price is over 7-8 times the median income, leading to significantly higher repayment burdens even with lower interest rates.

Current generations face a prolonged period of high house prices and stagnant wage growth, which have compounded the difficulty of homeownership. The need to save for a longer period to afford a deposit, coupled with higher overall housing costs, makes the current housing market much more challenging than the temporary high-interest rate environment of the 1980s and 1990s.

Further to that, it also meant for those saving for a home, savings rates were extremely high allowing for rapid growth of savings/deposits.

“We didn’t need all the fancy luxuries kids have today like smartphones”

Many "luxuries" today are often necessities for modern living and working. High-speed internet, mobile phones, and computers are essential for most jobs, especially in the gig economy which makes up a large portion of secondary incomes for younger generations. Moreover, cutting back on these essential items would not significantly impact the ability to save for a house because the disparity between incomes and house prices is so vast. The cost of high-speed internet or a mobile phone plan is relatively small compared to the tens or hundreds of thousands of dollars required for a house deposit.

“I only earned $XYZ in my first job”

I don’t even know why I am addressing this directly. The evidence for an increase in income vs dwelling prices is substantial. Head over to our “Straight Facts” page for more info.

“Our first house was much smaller and had dirt floors”

While we can’t completely dismiss this argument, the expectation of larger homes is driven by increased family sizes, modern standards of living, and building regulations. Furthermore, the high cost of land and construction makes even smaller homes significantly more expensive than in the past.

“We didn’t get all the housing grants kids get today”

While the primary counter argument is that the grants and relief now offered to support home ownership doesn’t come close to making up with the disparity of income to housing prices and housing affordability as a whole, it’s goes even further than that. These Government policies are CONTRIBUTING to the increase in house prices and housing affordability issues. It simply further increases demand, further increasing prices.

“Kids these days aren’t willing to make sacrifices for their first home”

Boomers often claim they worked harder and made more sacrifices to afford homes. However, this argument overlooks the significant economic changes that have made homeownership more challenging for Millennials. In the 1980s, a single income was often sufficient to buy and sustain a household. The median house price was around 2-3 times the median annual household income, making it feasible for one income to cover mortgage payments and living expenses.

Today, housing prices have surged to over 7-8 times the median household income, necessitating dual incomes to afford a home. Despite working long hours and often holding multiple jobs, Millennials face higher costs of living, including education, healthcare, and childcare, which were more affordable or heavily subsidized in previous decades. Furthermore, wage growth has stagnated, failing to keep pace with the rising cost of housing, making it significantly harder for today's young adults to achieve homeownership despite their hard work.

“Kids these days are lazy. I used to work 27 hours a day and walked to work uphill both ways”

Wrong. We work similar hours, for lower paying jobs and need a higher level of education to even be considered for entry level roles.

In previous generations, minimum entry requirements for many jobs were often less stringent. For example, in the 1980s and 1990s, many roles could be secured with a high school diploma or on-the-job training. The emphasis was more on gaining experience through work rather than formal qualifications. This contrasts sharply with today's job market, where a higher level of education is typically required.

For Millennials, the landscape is quite different. According to the Australian Bureau of Statistics, in 2021, over three-quarters of Millennials had a non-school qualification, such as certificates, diplomas, or degrees. This is a significant increase from nearly two-thirds of Generation X in 2006 and less than half of Baby Boomers in 1991​. The shift towards requiring higher educational qualifications means that young adults today often need to invest more time and money in education before they can even enter the job market.

Moreover, the nature of jobs has evolved. Many positions now require specific technical skills and competencies that were not necessary in the past. For instance, proficiency in digital technologies and advanced software is often a baseline requirement, reflecting the technological advancements and the digital transformation of many industries.

Additionally, the job market today is more competitive, with a higher emphasis on qualifications and certifications. This requirement places a greater financial burden on Millennials, who often incur significant student loan debt to meet these educational standards, further delaying their ability to save for a home deposit​.

Source: https://www.abs.gov.au/articles/back-my-day-comparing-millennials-earlier-generations

“My first house was in a less desirable area, kids want their first house to be in the Sydney CBD”

Sorry Millennials, I am leaning towards the Boomers on this one however that’s easy for me to say as I have always lived in a semi-rural area. In saying that, the Millennials raise some good points here.

While this strategy was feasible in previous decades, it is less practical today due to several factors. Firstly, even less desirable areas have seen substantial price increases. For example, suburban and rural areas that were once affordable have experienced significant growth in property values due to urban sprawl and increased demand. With the acceptance of Work From Home (WFH), the demand for rural properties has further grown only putting upward pressure on rural house prices.

Additionally, the cost of land and construction has risen sharply, making the initial purchase price of homes in these areas much higher than in the past. The ability to buy cheap and renovate has been hampered by these increased costs, along with stricter building regulations and higher costs for materials and labour.

Furthermore, economic and lifestyle factors have changed. Many Millennials are drawn to areas with better job prospects, amenities, and public transport, which are typically more expensive. This necessity limits their options for buying in less desirable areas. The reality of modern economic conditions means that starting in a cheaper area and moving up the property ladder is much harder than it was for previous generations.

In the defence of Boomers, I do tend to get frustrated when I hear “there’s no jobs and nothing to do in rural areas”. This just isn’t the case, there are plenty of opportunities in rural towns for “everyday millennials”, especially taking into account the WFH acceptance. As for there being nothing to do, I guess that comes down to personal preference. I enjoy the quieter rural lifestyle (and for reference, no, I don’t live in the bush, I’m 45 minutes from a major city).

I'll continue to address the common arguments made by Boomers as they pop up. But if you have any extras you think should be added, get in touch through our Contact page.