As in NZ, Australian house prices have risen faster than wages across the Tasman. Photo / Getty Images
As in NZ, Australian house prices have risen faster than wages across the Tasman. Photo / Getty Images
An Australian TV host has unleashed on Baby Boomers with a brutal message aimed at smashing the myth that young people are simply too lazy to save for a home.
While it remains a persistent talking point among older Australians and New Zealanders that younger generations are bad savers, Sunrisebreakfast TV host David Koch analysed the issue to determine exactly why home ownership seems increasingly out of reach in many countries.
Koch compared the financial burdens weighing on those trying to buy a home in the late 1980s versus now - and he found it had nothing to do with avocado toast.
“Back in my day, I was paying 17 per cent on my home loan. Now that was tough,” Koch told viewers.
“All right, now hands up who has said that or been told that at a family get-together recently? Is that grumpy oldie right or wrong? These are the facts.”
David Koch is the host of Australian morning TV show Sunrise. Photo / Supplied
While it is true that the interest rate in 1989 and 1990 was at a staggering 17 per cent, compared to the six per cent rate today, Koch said exceptionally cheap house prices meant Boomers still had the better deal.
House prices have skyrocketed in Australia and NZ in recent years, while wages have struggled to keep pace.
“Back in the 80s, the average cost of an Aussie house was A$70,000. Now it’s A$700,000 — 10 times more expensive,” Koch told Channel 7′s Sunrise on Monday.
“A 20 per cent deposit has gone from A$14,000 to A$140,000, but wages have not kept pace.”
The TV host explained how, in the 1980s, the average salary in Australia was A$19,000. In 2023, it’s about A$90,000.
“So in the 80s, the price of a house was four times the average person’s income,” he said.
“In 2023, it’s eight times the average Aussie salary.”
The situation is even worse in the most densely populated parts of the country. A 20 per cent deposit on the median dwelling in Sydney, for instance, is a staggering A$220,000.
Contrary to the Boomer myth, a recent study from the University of Sydney found the majority of young Australians already had a robust savings plan in place.
The study, which tracked a group of 25-35-year-old prospective first-home buyers in Sydney and Perth, found that most had implemented standard budgeting strategies like cutting back on discretionary spending. One of the households surveyed only ate two-minute noodles for weeks at a time in their attempts to buy a home.
Still, the study found that 95 per cent of the group didn’t even come close to having enough savings for a home deposit. Three-quarters had less than A$5000 in savings, and 40 per cent planned to call upon the bank of mum and dad when it came time to buy.
Koch’s tirade comes after a Finder survey revealed that one in three young Australians have missed their mortgage repayments in recent months.
The Reserve Bank of Australia’s 10 consecutive rate hikes since May are biting, as the financial comparison website’s monthly cost of living report showed 31 per cent of Gen Z borrowers (born 1995 onwards) had missed a mortgage repayment in the past six months.
