sorb the financial risk?
“Rent money is dead money!” we’re told, mostly by people who got into the property market when it was far more affordable. It isn’t “dead money” though.
Paying rent means you have a home to live in — hardly a waste. When my parents — then newly married and in their early 20s — bought their first house in the outer suburbs of Brisbane in the early 80s, it cost about a year of dad’s income as a rookie cop.
That would barely cover the deposit on the same house today. The median Australian house price is now seven times the median income. If you’re single, forget it. Sure, a lot of states, including the NT, have first homebuyer schemes designed to help young people into the market and boost the supply of homes.
But most of these schemes are limited to new builds.
And with more of those lazy Millennials moving into contract or casual work — voluntarily or otherwise — it’s easy to see why they would be reluctant to take on massive debts.
Homeownership does reduce financial risk in retirement. But that seems a distant dream for young people who are told they’ll need close to $1 million in superannuation or they’ll be eating dog food through retirement. It makes
“All this reckless spending on such pointless fripperies is preventing them from using money for its one true noble purpose”
sense to enjoy the delivery massaman curry today.
When mum and dad bought that little house in 1982, they had a fair idea of what was ahead of them. They’d work, have kids, and sooner or later pay it off. That’s a certainty most Millennials don’t have.
We’re told constantly that the jobs we do now probably won’t exist in a decade or two. It’s difficult to motivate yourself to save for a future you can’t imagine.
I don’t know where I’ll be in five years time, and for the most part, I love the freedom that brings. For the time being, I’m happy to take my cues from the Germans.