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

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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%
FixedMore details
NO UPFRONT OR ONGOING FEES

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

NO UPFRONT OR ONGOING FEES
FixedMore details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

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. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of January 18, 2022. 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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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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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