Watch Insight's episode Boomers v Millennials – which asks why this generational divide is so great and what can be done about it – on .
Retired teacher Bruce Jackson bought his first home in Albury in 1984 for $60,000. It was a tough time for the then 25-year-old, who was earning $22,000 a year and felt he had to leave Sydney to be able to afford a house.
“Forty-three per cent of my net salary was going out to repay that loan,” he told Insight. “You’d eat mince every night. And you wouldn’t eat the quality mince. You’d eat the cheap mince.
"I never went on holidays ... Never bought a new car. I got given a second-hand car at 17. It was a 17-year-old car then [and] I've still got it."
Bruce took in boarders to cover the repayments and even asked his girlfriend at the time to contribute to the mortgage and bills.
So, when his 23-year-old daughter recently bought a home, also in Albury, southern NSW, the Baby Boomer (the generation born between 1946-1964) was pleasantly surprised by how easy the process was.
“She just stayed living at home when she finished work,” he said. “And after two years she said: ‘Dad, I might have enough for a deposit for a house.’”
“Just the other day she said, ‘I don’t know what everyone’s going on about. It really wasn’t that hard'."
Bruce Jackson says the cost of mortgage payments has meant he's never been able to buy himself a new car. Source: Supplied
“I don’t think she’s got that problem," he said. "In fact, she’s just paid for a trip for me to go away!”
Today's homebuyers facing soaring borrowing costs
In 1984, when Bruce brought his first home, the average income was $19,188 while the average cost of a property in Australia was $64,039. This means people needed to borrow 3.3 times their income to afford the average property, according to financial comparison site Finder.
In 2023, by contrast, the average income is $90,896, while the average home costs $920,100, Finder says, which means buyers now have to borrow 10 times their income.
In 1984, a 20 per cent deposit was two-thirds of a year's income. Today, it's just over double.
Many first homebuyers today are finding themselves locked out of the housing market due to an inability to afford a deposit, which is typically 20 per cent of the property price. Source: SBS
Having spent several years travelling during her 20s, the Millennial (those born between 1981-1996) says she would love to have somewhere to call her own.
“Owning a home, having a family is definitely something (my partner and I) want to do .. but we want a house before we do that."
Millennial Ashley Swallow says having spent several years travelling during her 20s, she would now love to buy her own home. Source: Supplied
“I don’t want to be having my first child at 35 … everything has to work out to be able to do that.”
Despite feeling under pressure, Ashley said she doesn’t regret any of her travel experiences or her choices to pursue a career with an irregular income and high overhead costs.
“I kind of lived my retirement younger than older. And I’m… ok with that.”
Challenge of income replaced by challenge of wealth
University of Sydney economist Gareth Bryant says while homebuyers in the 1980s and 1990s such as Bruce were plagued by high interest rates (in January 1990 the official cash rate was 17.5 per cent) and unemployment levels significantly higher than today, the challenges first homebuyers face now are very different.
“Previously it was more of a challenge of income: ‘Do you have enough money to cover your mortgage?’ Rather than actually being locked out of home ownership,” he told Insight.
“Now it’s more of a problem of wealth and actually being able to access the wealth needed to get the deposit.”
He says experiences like Ashley’s are becoming increasingly common among Millennial Australians who are being shut out of the housing market in never-before-seen numbers.
"House prices have increased over the last two decades at a much faster rate than wage increases," he said.
"So we're seeing a structural change where, rather than renting being something that's a temporary phenomenon, people are starting to confront a situation where they'll become lifelong renters."
"Even when [Millennials have] decent jobs and decent incomes, they're finding them locked out of the housing market."
Strategies such as saving more or earning extra income through overtime shifts or a second job may have been helpful to Baby Boomers looking to buy their first home, but Gareth’s research has found these methods are not nearly as effective for Millennials due to the very large deposits needed to buy property.
“There was one key factor, however, that did make a difference," he said. "And that was whether or not people had access to some kind of parental support in terms of entering the property market and getting that deposit."
Short-term happiness versus long-term goals
However, buying a home with minimal parental help is not an impossibility for all Millennials.
Josh Franzin, 33, lived at home while he saved for a deposit and built his house on the outskirts of Sydney in his mid-20s.
The truck driver has since been covering his mortgage and putting money into investments by working up to 80 hours a week.
Josh Franzin built his house on the outskirts of Sydney in his mid-20s and has worked overtime to cover his mortgage repayments. Source: Supplied
“But also, it’s about doing something that you’re comfortable with.”
When he built his home 50km outside Sydney, Josh said friends would tease him that they’d need a passport to come visit.
But it was worth it for him to get into the market, he says.
“You just kind of have to evaluate what you value more and whether it’s short-term happiness or long-term goals, and really decide what you want to chase.
“Put a dollar value on it and go for it.”
