Millennials smash avocado myth, stashing cash and sacrificing for home ownership

author-avatar By on February 19, 2020
Millennials smash avocado myth, stashing cash and sacrificing for home ownership

Photo by STIL on Unsplash

Millennials are more optimistic about achieving home ownership than the oft-maligned baby boomers.

The idea of young Aussies being reckless with their money has been smashed with research showing more than half are willing to go without the little luxuries, like weekend brunches, to afford a house.

The results were revealed in a national survey from Bankwest, which showed millennials still believe in the Great Australian Dream of home ownership and are willing to make big sacrifices to achieve it.

In a blow to the 'smashed avocado' trope - made famous by renowned demographer Bernard Salt - over half (57.7%) of millennials said they would be happy to go without the little luxuries in life such as coffees, weekend breakfasts and streaming subscriptions, while 56% said they were willing to sacrifice holidays to save for a house deposit.

Thinking about taking out a low-rate, variable owner-occupier home loan? Below are a handful of low-rate loans in the market. 

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 16, 2021. View disclaimer.

Just over half (55.3%) said they would be prepared to go without big ticket items like new appliances or a car while saving. 

A quarter said they would be prepared to delay their dreams of starting a family, move back in with their parents, and even cut back on necessities like groceries, meals, clothes and heating/cooling costs to save. 

Despite increasing house prices and the rising cost of living, it appears the Great Australian Dream is still alive and well for millennials. Nearly half of millennials (46.6%) said they still believe in the Great Aussie Dream of owning a home, compared with 36.5% of Gen X's and 43% of Baby Boomers.

Interestingly, over half (55.2%) of Baby Boomers said they don't believe home ownership will ever be achievable for them compared with less than a quarter of millennials. It comes after data from the National Housing and Investment Corporation (NHFIC) found that 11% of applicants for the First Home Loan Deposit Scheme were between the ages of 40-59.

Bankwest General Manager Personal and Third-Party Banking Donna Dalby said the results smash the stereotype that millennials are frittering away their money.

"These results are really promising and paint a very different picture of young Australians to the one we usually hear," she said.

"This is not a bunch of carefree kids ignoring the future for an indulgent moment; this is a group of people who have financial goals they want to achieve and are willing to sacrifice big to do that."

However, only one-in-five (19.9%) of millennials said they knew exactly how much they needed for a deposit, while a similar number (20.1%) said they made a savings plan but failed to stick to it. 

More than two in five millennials (41.3%) said they made a savings plan and were able to stick with it, while 58.4% admitted to having a rough idea of how much they would need for a house deposit.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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