Smashed Avocado-Gate - Bernard Salt

Brands jump on #SmashedAvo gate - AdNews

My dayjob is in the advertising/marketing sector. In one of our trade-press online sites - AdNews - I was surprised to see content semi-relating to Bernard Salt's recent "Smashed Avocado" statement with an Advertising twist (ME Bank campaign).

For those who don't know him, Bernard Salt is one of Australia's most reputable and educated Demographers, providing columns for both mainstream press and property-specific press. I enjoy reading his stuff. His column challenging first home buyers who complain about house prices whilst then going and paying for their luxury $20 Smashed Avocado breakfast has angered many young folks.

As someone who is a Gen Y myself, I see his points but also disagree too. Houses-on-land in the wider metro areas of most cap cities ARE out of reach of even middle-high income earners. This isnt a case of 23-years olds whinging they cant afford a $2mill home in Bondi. It is a vase of 30-year olds, possibly with kids already, quite reasonably complaining about getting what is now a $900K house-on-land out in the far-flung suburbs. The folks complaining are typically on median-to-upper median salaries. They arent wanting luxury dwellings with all the trimmings. Even a crapbox unrenovated dingy old 60s house with no mod-cons, really is out of reach.

I feel for them because, save as they might, they are renting at high costs elsewhere, earning little on their savings due to low interest rates (making deposits all the while harder) whilst juggling with the fact that the jobs actually paying decent wages are STILL centralised in CBD-ish locations in cap cities. This means that they arent exactly "choosing" to live (rent) in the inner rings versus saving a couple hundred bucks to live in the far outskirts, it is necessary for them.

Think about it; 30-yo with decent paying job that is a CBD worker and has a young one (or two) at home. The decent jobs are typically 10-hour days, 5 days a week. If you tack on 2 hours each day for far-flung commuting, your net position is behind, not ahead. 12 hour days = no quality time with your family, all to save a bit on rent. But while renting the prospect of owning a home (as per above) gets further and further away.

Now, it isnt impossible and sacrifice will always help those who really want to own a house in Sydney/Melbourne, but it is just so utterly unaffordable for them.

So IMHO... the smashed-avo thing is a bit of a slap in the face. Yes there are those having their daily $4 coffee, fancy meals out, 2x overseas trips, new car / other toys. And for them, they deserve much criticism IF they are hungry to own a home and are complaining about it. For those who dont want to buy and are haply renting, I say, enjoy your life and the trimmings if that makes you happy.

 

He has some weird ideas. I read an article of his last year (I think) where he said he thinks in the future, rather than take out a mortgage on an entire house, people will get one over an individual bedroom just to get "on the ladder".

 

In the early 1990's I was working out past Liverpool, some 50km from home. Subdivisions going ape$#!+, land was worth $75k-100k/acre. These brick veneer homes are now 20 odd years old and can still be bought for <$700k if that's what you want. Older areas such as Blacktown still have older fibro houses in the same price bracket, possibly with a little more land, closer to town and rail. Oran Park is further out again, new subdivisions with new houses with all the mod cons, same price tag or Narellan and its surrounds are sub-$600k.

These are FHB territory not your inner city 'terror souse' or semi which all top $1m on a bad day.

Sydney is an awfully big place and we have to learn to live with its size - if we want affordable, go where it exists but remember the trade off is proximity to the cbd but wait, isn't Parramatta the centre of Sydney? Bonus buy - Blacktown as it is only a few stops on a fast train away.

Yes, I pay $4 each for each of my coffees, no I don't work in the cbd (I am taking work from the centre of Sydney), my train goes through the city but against the flow and fills up again as it heads out of the inner west to that second bustling CBD.

 

Perhaps people should wait until they are in the correct financial position before starting a family?

It sounds harsh, but like it or not having a child/children is a financial decision to some extent.

 

I like reading Bernard Salt's columns. There's often a bit of tongue-in-cheek humour that he uses to make a point. The Smashed-Avocado theme has worked brilliantly in this regard.

People have been whinging about housing affordability forever, it's almost a national past-time. I understand that Sydney house prices are ridiculous.. but contrary to Sydney-ites popular belief (and that of the media) Sydney is not all of Australia, and thank-god for that!

 

$900k in far flung suburbs? Our PPOR was recently valued by the bank at $650k. It's very large Federation character weatherboard built in 1903, walking distance to train station, (less than a minute!), shops and schools. Its a fabulous character filled home, open fire in every room, 11 foot ceilings, timber floors right through etc.

My suburb is green, open and friendly, it has a great sense of community. My house is no way a starter house, it's on decent sized block with large garage and a pool. I'm a ten minute drive in one of two directions to great beaches.

Nice 3/4 bed family homes in my suburb can be had for $450k. Units for under $350k

My partner commutes to Melbourne city for work every day by car, anywhere from an hour to 1:15 generally. She could just as easily train it as you can see the station from our front door.

We're not out in the Wild West.

I aint' telling you where we live as it's getting too busy as it is now that people are realizing what they can have "down here" (there's a clue).

 

Or even more "up here".. we paid $640k for our character home in Brisbane. I drive to work in under 10mins to the Valley (next to the CBD).

In Sydney a fho can have a diet completely free of smashed avo and coffee, but their dream of buying a nice house within a reasonable commute of the city is fantasy..

 

Canberra has the highest wages in Australia and probably the easiest commutes. We bought our house for 450k three years ago and it was 5 mins from my workplace by car or 10 on the bus. The public schools in the zone are all good too. Getting almost 6% yield at present

I do feel sorry for young people trying to buy in Sydney though.

 

correction...sydney is the whole of australia...i mean, where else can you get smashed avo on multi grain toast with freshly squeezed orange juice sprinked with sugar and cinnamon?
Surely, that is worth the price of admission

 

As a young person in Sydney I'd be happy to just rent...net yield is so bloody low property doesn't make sense as anything but a CG play. Your competition is just your fellow wage earners, and as we know, wage growth is going nowhere fast! So, if you dont want to save for the prop market (or "cant") enjoy the smashed avos, automate savings of 20% of your income in index funds, salary sacrifice into super and enjoy life. As long as you are building other assets who cares. the market always needs renters! (and this is the part of the market speculators cant influence...its a more "true" market) people just need to be more flexible with their outlook.

 

@The Falcon Amen to that.

The day that article came out and got splattered across facebook I got so hungry for smashed avo and poached eggs that I took myself out for lunch.
If this conversation doesn't end soon I'll never be able to buy my next IP.

 

I'm coming "down there", I hope the beach is good! Australia is a big place but flying to other cities to visit others is just 1-2 hours away. There is no reason not to try other places

I can make my own avocado toast.... $10 lasted for a week....

 

sorry. you are right. you also forgot the burgers.. where else can you burn the crap out of a hamburger bun, and sell it as "activated charcoal" for $100.

 

You can get it in Perth, but it will cost $42 and you have to order at the counter.

 

haha..yes.alright...
in sydney it will cost $41, and a waiter will serve you at your table.
In brisbane...there is no such thing- us brisbaneites only know how to hunt for our meals - spear fishing, etc....dugout canoes to go on out to moreton bay to catch some seafood etc..
Over here, everyone raises chooks- so they can lay some eggs and thus its free.
Dont laugh- gotta eat

 

So many truths in this article.....lot of people are whining about things.....the reality is that you can still buy in Sydney...you just have to make compromises in the short term....there are still units that can be bought under 400k within 18 klms of the city - i.e. Wiley Park.

People just won't compromise......short term pain for long term gain.

 

I don't know where you mean but I'-ll be keeping an eye on your posts!

I find myself furiously agreeing and disagreeing with him all at the same time.
I think the main thing is that people need to wait for the right time in the cycle if they want to buy in Sydney. And we have to accept that it will continue to grow and become more and more out of reach.
Makes sense to move.

 

Are they easy to care for? Which type? Hubby is thinking of getting 2 when we have a house but I worry about taking care of them. Plus need separation from our small dog

I think it's started with Morning... maybee....

 

Maybe I should start a "Lets Hype Somerville" thread?

Oh shoot, I just let the cat out of the bag....

 

Exactly. Sydney has and always will be the most expensive city in Australia. I was reading a couple of articles featuring high rise Harry and he wasn't concerned about the apartment glut- just bring in more migrants was his response.