As we all know the federal government has released the 2017 budget, one of the key things we have seen come out of this budget is the First Home Super Saver’s Scheme which is where first home buyers have the opportunity to put pretax dollars into super to assist in saving towards a deposit. I believe this is a great step forward to be able to help home buyers getting to their first property, buying the first property is always the hardest one because you’re using cash savings when you start to build a portfolio.
But the real question is will any first home buyers take advantage of this scheme?
I honestly believe this scheme will only benefit the ambitious home buyers who would probably purchased a property with or without this opportunity i think that if your willing to save and make sacrifices you will get ahead, and if your not you wont its as simple as that.
This got me thinking, what has changed from the baby boomer generation to now to make it so hard for Gen Y to get into the property market? is it price? Is Australian real estate just too expensive for first-time buyers, is that the issue? Or is the issue wages? are Gen Y not paid enough money to be able to save? Well no I don’t believe that is the case. Consistent wage growth and a generation of educated Australians are being successful in achieving top jobs at a young age.
So what has changed?
I believe it’s a mixture of two things:
One is entitlement; a lot of Generation Y want the house that Gen X and baby boomers have, 4 bed 2 bath 2 car, good block size & walking distance to cafes properties that have taken a life time to purchase but todays generation what it straight away.
The Second, is travel. If you speak to baby boomers and ask them how much travel they did in their 20’s and early 30’s the majority of that generation will say none, they spent the time if they were lucky going to the Gold Coast or maybe even camping over the Christmas or Easter break. Today, Bali, Fiji, America, Europe, the world is smaller and it is easier to travel today than ever before and I believe this is one of the key reasons why generation Y are struggling to be able to afford to get into the property market. Instead of using $15-$20,000 on a property deposit they are using it to spend two months in Europe, or a week skiing in Japan.
Let’s be honest, it’s never been easy to get into property. Back in the 1970’s when people were trying to put together a deposit for a $30 – $50,000 property they didn’t say oh jeez this is easy we should buy four or five of these. They saved money and they purchase property and they made sacrifices, which now means a lot of smart baby boomers are currently living in their own home with no mortgage.
But back to the budget I think this Scheme has great opportunity and a positive step in the right direction, I think one of the critical elements of putting this into action will be marketing its benefits, not only to first home buyers but also encouraging employers and superannuation companies to remind this stuff/customers that this opportunity is available and is a great way to assist in saving.
To find out how much difference this scheme could make to your savings follow the below link and input your situation and find out for yourself;