Owning a home has been the great Australian dream for many — but for most young people, it’s become a nightmare.
Sydney mortgage broker Quang Huynh explains how saving for a deposit has drifted beyond reach for the young generation due to one significant problem.
“Young people want the best of both worlds,” Huynh tells 7Life.
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“They want to buy that new luxury car or go on a once-in-a-lifetime trip to Europe or the Maldives — plus get into the property market in a fancy suburb.
“Unless you are earning top dollar, like $300,000 plus — which, if you are under 30, I’ve only ever seen one per cent of first-time home buyers achieve this — your savings will be limited.
“The $30,000 to $40,000 you splurged on the holiday or car could have been saved towards a deposit.”
Mortgage broker Quang Huynh has dished out the little luxuries you need to be willing to sacrifice for a home deposit. Credit: Quang Huynh/@thathomeloandude
If you are serious about buying a home, Huynh says you can start by looking at ways to save money on things you love — rather than cutting things out of your life “cold turkey”.
“Before my first home buyers decide to cut back on their purchases, I tell them to find alternative options that can replace the product or services they are currently spending their money on,” he says.
“Going cold turkey and cutting back on things while trying to save for a deposit is usually typical advice Boomers give to first home buyers.
“I find this very impractical and it instead gives a negative connotation to home ownership for young people.”
Self-sabotage savings goal
The mortgage broker of 15 years says when you stop spending money on discretionary things, you will end up self-sabotaging your savings goal.