Everyone is aware that there’s a bit of friendly (and sometimes not-so-friendly) generational rivalry going around between the Baby Boomers and the Millennials, with a lot of spicy debate around which generation faces the biggest number of issues.
Millennials think Baby Boomers inadvertently set them up to fail – while Baby Boomers believe their younger counterparts are lazy, smashed-avo-loving layabouts.
But just how true are either these assumptions, if at all?
How the generations compare
There are a few major differences between the lifestyles and upbringings of Baby Boomers and Millennials, which create a clear distinction in their experience of life.
Take career paths, for example.
Generally speaking, Baby Boomers were likely to leave school, gain employment, then remain in that job throughout their working career.
Baby Boomers were definitely loyal, even if it was to their own detriment.
Millennials, on the other hand, can enjoy something called the ‘gig economy’, which embraces freelancing, virtual positions and moving from job to job, seeingly at a whim.
This freedom doesn’t create the same job stability and financial security that Baby Boomers enjoyed, but it lends itself more to expression of creativity and potentially higher levels of individual happiness.
While high numbers of Baby Boomers were likely to be married and planning for kids by the time they were 25, Millennials are waiting much longer to lock it all down.
Millennials have also been deemed more health-conscious than their older generational counterparts, putting more emphasis on including daily habits and lifestyle in their overarching view of ‘healthy’.
Further, Millennials have been noted as undertaking more formal education to Baby Boomers.
But what about housing?
Was it really harder for Baby Boomers to own their home?
When it comes to buying a home, Baby Boomers can often be heard saying they had it much harder.
To determine whether this is true or not, let’s take a look at both situations.
Back in the Baby Boomer home-buying era, around 30-40 years ago, they were dealing with a period where interest rates reached 17 percent, compared with rates of around 2-3 percent at the time of writing this article.
At the same time, housing was much cheaper, with a median house price of $36,800 in Sydney, $32,900 in Melbourne and $26,275 in Brisbane.
To keep this relative, the average wage in 1975 was $7,600, compared to around $72,000 today.
Over the years, as with all goods and services, the price of property has increased.
Property moves in cycles, with boom and bust periods.
- Also read:Exploring the link between population growth and property prices
- Also read:Australian unit market update June 2022
- Also read:Here is what we have been buying over the last 12 months
- Also read:EXPLAINER: New home buyer scheme helps frontline workers get into the property market
- Also read:Number of profitable property resales takes first dip in 18 months | Corelogic Pain and Gain Report
According to statistics from the Reserve Bank of Australia, between the years of 2012 and 2017 in Sydney and Melbourne, property prices rose 75 percent and 58 percent, respectively – this was most definitely a growth period!
So Boomers had it easier – right?
Property prices were around the same as a new small car costs today.
Surely, that means Baby Boomers were able to buy property more easily… doesn’t it?
Before you make that decision, another point of difference to consider is the income to price ratio, which determines how high the price of a house is when compared to annual income (before tax).
When we take a look back some twenty years, Tim Lawless, property analyst and head of research at CoreLogic, says “a typical ratio was around four and a half times”.
That means the average house cost around 4.5 times the average salary.
Today, the ratio is generally around six and half and seven times – higher in Sydney.
“Off that measure alone, it’s clear that getting into the market has become a bigger issue than it was,” Lawless says.
This might be why the number of renters has been steadily increasing over the years, with a 2017 report published by the Committee for Economic Development of Australia (CEDA) revealing a rise of 22 percent in the amount of renters aged between 25 and 34 years who rented, between 1982 and 2012.
Unfortunately for those out for blood in this debate, it seems that there’s a relatively fair argument for both generations having either an easier or harder time in the housing market.
Both age groups had their challenges to overcome – and property buyers of the future will have their own set of setbacks to conquer.
So, rather than directly comparing the two generations and debating about ‘who had it harder’, it’s best to view it as an equal playing field.
Cross-generational understanding could encourage both generations to teach and learn from each other.
And, realistically? It doesn’t matter.
Both generations had their own struggles in terms of property, in different ways.
You can either complain about who has it harder, or start working on some strategies today to grow your own wealth through property investing.
Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on
If you're wondering what will happen to property in 2020–2021 you are not alone.
You can trust the team at Metropole to provide you with direction, guidance and results.
In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that's what you exactly what you get from the multi award winning team at Metropole.
If you're looking at buying your next home or investment property here's 4 ways we can help you:
- Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! This will give you direction, results and more certainty. Click here to learn more
- Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property. Click here to learn how we can help you.
- Wealth Advisory - We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- Property Management - Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.