The Australian housing crisis has forced my wife and I to reevaluate our short-term and long-term plans.
When some friends and associates learn that my wife and I have moved to Vietnam temporarily they inevitably ask “why?”
After answering this question enough times I’ve got it down to “because it costs four times less in rent to live in Danang than it did when I was living in Sydney a year ago.”
They often nod in acknowledgement.
It’s not surprise that the cost of living in Sydney is at an all-time high.
Furthermore, if you didn’t buy a house or apartment before the early 2000’s, chances are it’s going to be extremely difficult for you now to enter the property market as a first-time home owner or an investor.
Here are two videos that explain what is happening right now in Australia.
The following video was filmed in 2017:
The above video was even more frustrating for me, especially when the 35-year old “construction mogul” made this ridiculous remark:
“When I was trying to buy my first home I wasn’t buying smashed avocados for 19 bucks and four coffees at $4 each.”
Are we still carrying on about the tired smashed avo argument?
It would take you approximately 20 years to save up the 20% deposit of $180,000 by not spending on smashed avo toast and coffee for a $900,000 property.
Here’s the math:
$19 (for smashed avo toast) + 4 x $4 (for coffee) = $35 per day
Now, let’s assume you’re buying this 5 days per week.
$35 per day x 5 days = $175 per week
Now, let’s determine how much you’ll save in a year if you stopped buying the smashed avo and 4 coffees: $175 per week x 52 weeks = $9,100 per year
If the property costs $900,000 and you need a 20% deposit, then: 0.20 x $900,000 = $180,000
Using the savings from not spending on smashed avo toast and coffee, which is $9,100 per year: $180,000 ÷ $9,100/year = 19.78 years
So, it would take you approximately 20 years to save up the 20% deposit of $180,000 by not spending on smashed avo toast and coffee for a $900,000 property.
As another person commented on the video:
Not to mention the house cost $900k regardless of whether anyone is eating smashed avos or not. 200 people lined up outside a rental property aren’t there because they spent their money on smashed avos, they all likely skipped breakfast and will probably miss lunch. Nobody is even eating smashed avo anymore, that trend died with planking, and those who partook in the trend were cosmopolitan, idle rich, influencer types; not people saving for a deposit.
- Australian housing crisis: Nation to fall more than 60,000 short of target in first year: HIA (18 Aug 2023)
- Australia’s housing crisis: How did we get here and where to now? (University of QLD Contact Magazine)
- Housing market fix that simply won’t work (News.com.au, September 2, 2023)