A LITTLE more than a year has passed since social commentator Bernard Salt unleashed a firestorm of controversy by suggesting that young would-be home buyers stopped spending so much on smashed avocado toast if they wanted to save for a deposit.
Salt’s comments went global, with critics pointing out it would take thousands of avocado toasts to add up to a deposit, even at hipster cafe prices.
The great avocado debate might have run its course since then, but the underlying problem remains.
Housing costs in most parts of Australia – and we are not the only country afflicted – have risen to record high levels, with no real consensus as to how to tackle a problem that goes to the heart of how we see ourselves as a nation. In Newcastle, national and international trends are overlain by the demographic changes that have taken place in the city’s inner suburbs since the closure of the BHP steelworks in 1999.
A similar process has occurred near the former Boolaroo smelter, although to a lesser degree, thanks to ongoing lead contamination.
In inner Newcastle, once-cheap suburbs that had houses well within reach of first-home buyers, have become gentrified, repeating a de-industrialisation that took place in Sydney a generation or two before.
Suburbs such as Carrington and Wickham are now real estate hot spots, with first home buyers finding it increasingly difficult to build a deposit – at least 5 per cent to 10 per cent of an ever-rising price – let alone get a look-in at auction. In the face of such an overwhelming trend, what can be done?
Despite a warning from former Reserve Bank governor Glenn Stevens that “self-defeating” subsidies might only inflate house prices, the state government announced an expanded package of stamp duty exemptions – starting from July 1 – that were taken up by 1476 Hunter purchasers in its first few months.
For first home buyers, every little bit helps, but the international nature of the house price explosion indicates we are in the grip of forces beyond the power of any one government.
In such circumstances – and with the desire for home ownership such a strong Australian trait – all the would-be first home buyer can do is keep on saving. And enjoy an avocado toast from time to time.