I’m not a financial adviser, not a property expert and not going to use a bunch of micro survey results to validate the rest of this post. But I think you need to hear it.
You’ll read this in the media over and over again, you’ll hear the moans and groans on social media and eventually you’ll believe it. Housing in Sydney is not affordable. The next generation won’t be able to afford a home.
It’s actually completely true, for you.
As a society we’re fantastic at blaming people for things. The housing “crisis” is no exception. Young Australians can’t buy a house in Sydney because of anything else, except what you can control. It is no one else’s fault that you can’t afford a house. Only yours. The main thing I wonder is whether you are really trying to buy a house in Sydney, whether you are being realistic and whether you’re just using it as an excuse. Stop blaming others, stop looking at twitter for answers, make some changes.
“House prices keep going up!”
Yes, thankfully they do. No one wants to buy a house and see it depreciate, they’re generally investments. House prices will over time continue to rise and that’s not going to change. Accept it and eventually (when you own a home) you’ll appreciate it.
“The cost of living is going up!”
Yes, so is the average income. Now, some will say that our average income is not rising at the same rate as the cost of living. Accept it and do more. Stop being average, average people are likely to live average lives. Average people are unlikely to save a deposit on a home. To save a deposit and afford a mortgage, breaking news, you might need a SECOND job. If you aren’t earning enough – earn more. There are so many ways to make an extra quid in this wonderful world we now live in. Do odd jobs on Airtasker, jump on Seek and look for a weekend job, sell your iPhone 5 on Gumtree. Do more.
“I need work/life balance!”
Amen, go seek a grassy hill and soak up that sunset. Work/life balance is an amazing thing, it’s a wonderful feeling to clock out at 5pm and head out for a drink, or go to the movies etc. That’s a choice you make, it’s a choice to stop earning money or stop focusing on your goal of owning a house. Plus, you’re making the choice to go out and spend money that you don’t really need to. There is absolutely nothing wrong with living the good life, but you can’t then complain that you finished the week with less savings than you expected.
“But… I need things!”
We all do indeed. The iPhone 7 will likely launch this year and we’ll see a queue of people like every year waiting to drop over $1000 on it. Do they really need it? Can you not stretch that iPhone 5s into a third or fourth year of use? Turning 17 and about to buy a car? Maybe you shouldn’t get a loan for your first car, maybe spend a few grand and get a reliable yet older than normal car. It won’t be seen in the next Fast & the Furious but it’ll be all yours. You starting working from 14 and 9 months right? Slaving away at McDonalds? Good. Make smarter purchasing decisions and that piggy bank will grow.
“Over $1 million for a tiny house :(“
That apartment in Vaucluse, the tiny home in Surry Hills, they’re just so expensive and unaffordable. They really are. So don’t live there. These houses are selling for that sort of cash because some people can afford them. If you can’t and you’ve done all the above, then look elsewhere. Living within 20km of the CBD is expensive, the western suburbs and surround areas are extremely lower in price and are affordable to young Australians. It will take you longer to get to the city, it will take you longer to get to the Ivy. But you’ll have a bigger space, maybe even a yard, and you’ll have easy access to public transport that will get you to the city. It isn’t the most convenient option but you’re young, you can’t have everything. Also, if you’re going to compare the cost of a house from 20 years ago, ask your parents what the interest rates were back then, they’ll gladly tell you about the 16% years. Money is cheap to borrow today.
“I need a holiday though”
Then take a holiday. Does it need to be a lavish trip outside of your means where you’ll even borrow money to make it happen? Can it be a more local holiday, where maybe you even consider camping? Feel free to take that big trip but again, don’t then complain your housing deposit has dried up.
“I’m a University student”
University is an amazing thing, you’re there to learn so you can later earn, right? Well, is it impossible to earn while you learn? No time? How is that episode of Game of Thrones? There is always time, if you want it, something has to give. Get a part time job, start saving some money, use those uni breaks to do longer shifts. Study hard, work hard. Or don’t, but don’t complain that it’s too hard, it’s meant to be.
You’re welcome. Now, make a budget, be harsh on it, look at what you earn and make a real assessment on what you can put aside. If you need to earn more, start looking for alternatives for extra cash. Once you’ve done the money side of budgeting, look at how you spend TIME. Budget your time in the same way you budget money, how are you spending it, where could you spend it better and what are you getting from that time. Ignore the media – they’re generally journalists complaining about buying a hut in Newtown – , focus on you, focus on your goals and make it happen. Just be realistic, don’t compare yourself to others and work your ass off. If you think you can’t afford a house in Sydney, you’re not trying hard enough.