For generations, the Australian dream of owning your own home on a large plot outright by the time you retire was something very much in reach.
However, for the current crop of young Australians, it has started to feel less attainable, with house price increases vastly outpacing growth in real wages.
But financial experts say this is not the only thing standing in the way of the Australian dream for present generations – a cultural shift nicknamed the “Netflix effect” is also a factor.
The phenomenon centres around a lack of delayed gratification, particularly among younger people, who prioritise instant returns over the long-term saving needed to get a rung on the property ladder.
“I think societal change is what it comes down to and what I call the Netflix effect,” Adelaide-based High Rise Financial Solutions mortgage expert Marissa Schulze said.
“When older generations were growing up they had to wait for things – whether that was waiting until next week for the next episode of their favourite sitcom. They come to learn that good things come to those who wait.
“But nowadays, people are so much more use to having things now and at their convenience, through things like Uber and Netflix.”
She said this phenomenon may also, in turn, be affecting the way people manage their money and plan for the future.
“I think it has made it harder for young people to understand the value of money and of saving, as they are used to having things now,” she added.
However, she added that she did not necessarily believe the Australian dream was unattainable.
“It certainly is a lot harder for young people to save for a deposit, that is the big part, but it is still possible,” she said.
“I think maybe young people as a result of changing ideas and values do perhaps have less realistic expectations for what they want in a first home and so are less prepared to have a home as a first step then trade up.
“But I do also think there is a greater need to be more disciplined about saving, and lots of young people are.”
This is a view echoed by Finance Quarter director Sean Lee.
“The Australian dream is possible, but it will certainly look a bit different than it has in the past,” he said.
“I don’t think it is less realistic, but it just needs a lot more planning and is particularly hard to do if you are on your own.
Mr Lee said there was a greater need for education on financial matters, which he said would “make a big difference”.
“I think social media in particular has created a culture where we want things now – so people may borrow for a new car or a holiday just because they can afford to,” he said.
“This type of lifestyle makes it far more difficult to save up for a deposit.
“Things like subscription services and gym memberships do not sound a lot, but it does all add up.
“We have a ‘want it now’ society, but that does come at a price.”
Mr Lee added that there were also economic factors that had played a part in making the Australian dream appear less attainable.
“Over the last five years or so, some areas have seen house prices increase by between 50 and 100 per cent – and the average income has certain not increased by that much,’ he said.
Peter White of the Financial Brokers Association of Australia has been offering advice to would-be homeowners for 47 years and has seen buying habits change and evolve over this time.
“If you look back 20 or 30 years, I would say it was just as hard then (to save for a deposit) as it is now,” he said.
“A major difference now though is the costs of living.”
Mr White said potential new buyers may nowadays have to be prepared to compromise to fulfil their Australian dream.
“It may be that you have to come to terms with not being able to buy in the same area as your mum and dad – you may have to move to a different suburb or something smaller,” he said.
“Saving in the modern world is quite different to what it once was and it is a lot harder to do – and there’s always something that makes it harder.”
Mr White said he had noticed a change in how willing people were to financially plan for the longer term, adding: “I do think we’ve become a bit more relaxed and prefer to have things the easy way than the hard.
“The best advice I can give is for people to have realistic expectations about where you want to live – and that the best time to save is now.
“It might mean for a short while having to work a couple of jobs.
“It is also important to remember that it is not just the cost of the deposit itself you have to consider, you perhaps have to factor in about 5 per cent on top of that for other costs.”
Empower Wealth managing director Ben Kingsley emphasised the importance of being prepared to “trade up” in property rather than expect to immediately afford your dream home.
“If people want to live in large capital cities, the cost is always greater and it is always going to be harder to save up for,” he said.
“That is a particularly big challenge for your younger generations.
“It is that much more of a challenge if you want to live in a city.
“Getting that deposit is definitely getting harder and harder.
“However, if you trade down your expectations, you also trade down the size of the deposit you need and then have your first step.”
Mr Kingsley said being prepared to climb onto the housing ladder at a lower rung would open opportunities to upgrade later on in life.
“What you are finding is that people are coming into home ownership later in life,” he said.
“A big question is whether there is any sense of delayed gratification nowadays?
“The truth is, if you want the dream to become a reality, you are going to have to be prepared to buckle down.”
