How many smashed avos on toast would you need to sacrifice to save a 10% deposit on a median-priced, two-bedroom home in Sydney’s St George?
That was a serious question Millennials found themselves asking when property kingpin Tim Gurner Gen X-plained that the trick to buying your first home was to quit the avocado on toast – and home ownership has been a joke to Millennials ever since.
(The answer is 3,863, in case you were wondering).
But unlike Millenials, Gen Zs – ever the optimists – are actually regaining confidence about owning a home in their lifetime.
A recent Bankwest study of 1,600 young Australians found that 71% of 14-22-year-olds said they want to own a home in the future, making Gen Zs the most interested in home ownership out of all age brackets.
But that doesn’t mean Gen Zs think it’ll be easy.
Quite the contrary.
According to our Gen Z Wellbeing Check research almost half (46%) of Gen Zs are worried about housing affordability, with many still resigning themselves to a future of lifelong renting.
But what are the home ownership roadblocks for Gen Zs, and why are they so curiously optimistic despite them?
According to the Bankwest survey, Gen Zs are significantly over-represented in key home ownership confidence areas such as job security (36% vs 19%) and the state of the property market (35% vs 22%), as well as confidence in managing money (18% vs 10%) and understanding money matters (19% vs 11%).
In fact, Gen Zs were arguably the hardest hit by the pandemic in terms of job security, with leading fintech FIS reporting that a staggering 40% of Gen Zs reported losing pay, a promotion, or their job entirely during the first half of 2021 alone.
So when you take record-breaking property prices into account, objectively-speaking it’s not looking too good for Gen Zs.
Bankwest General Manager Home Buying Peter Bouhlas acknowledged Gen Zs are in a uniquely challenging position.
“We know the challenges of 2020 remain for many and Gen Z, representing much of the young, casualised workforce of the country, often balancing study commitments, are greatly impacted by those challenges,” Mr Bouhlas said.
“Young Australians face the multiple pressures of increased financial strain, a fall in confidence for job security, and an understandable increased negativity towards the property market.”
The bank of mum and dad?
But Mr Bouhlas said it was promising that the ever-optimistic Gen Zs were intent on home ownership despite the financial challenges.
“(What’s also promising is) that more than a quarter of Gen Z had spoken to others about their financial position and that they don’t believe today’s challenges will prevent them from pursuing home ownership in the future,” he said.
“It could be the case that the current low interest rate environment is contributing to the sentiment that home ownership remains achievable and helping Gen Z understand those factors is key for financial institutions.”
So, could it be? That maybe, just maybe, Gen Z can have their smashed avo (and eat it, too)?
