Boomers issue a brutal message to young Aussies struggling to buy a home – as they reveal how they never went on holidays and ate mince every night to afford $60k house

A baby boomer who paid 18 percent interest in the late 1980s and didn’t buy coffee says young people today have a right to it if they refuse to live in the suburbs, as she did.

Terri Cross, now 75, was a single mother paying off a duplex when interest rates continued to rise in 1988 and 1989.

“Horrible, absolutely horrible,” she told SBS’s Insight programme.

“I never went out, I worked, but I never went out after work and instead of going out to buy coffee – and it got to a point – where I couldn’t afford that and I had to take sandwiches to work and I could I don’t eat out and I’m really not exaggerating.

“It was really bad, but luckily I got through it.”

Ms Cross, who was unable to extend her loan for more than 30 years, said young people today are too focused on wanting to live in a nice suburb close to the city.

“Mine was close to 18 percent and I couldn’t renew the loan because I already had a 30-year mortgage, so I just had to cut down as much as I could.

“I think they’re not prepared, it might sound awful to say that, they’re not willing to expand and move forward.

“They want to be in a downtown area, that will always be difficult and always high.”

Ms Cross suggested that millennials were unwilling to move to far-flung suburbs like her.

‘When I bought my first house, it was an instant hit. I mean right away,” she said.

“It was like a country town and I think a lot of people don’t want to do that.

“We never had computers then and the internet and everything else.

“All Millennials can work from home, I think so.”

Retired teacher Bruce Jackson bought his first house in Albury, in southern New South Wales, for $60,000 in 1984 and admitted he couldn’t have afforded to buy in Sydney.

“When I bought my house I could never pay the interest on time, I could never pay the electricity on time, I used to sit behind the electricity for weeks and get reminder, after reminder, after reminder, and many times I had to get money borrow from other people to cover that and pay them back as soon as I had anything left,” he said.

Mr Jackson said he also didn’t go on holiday and eat ground beef to save money.

‘Every night you ate minced meat. And you wouldn’t eat the quality ground beef. You’d eat the cheap minced meat,’ he said.

“I’ve never been on vacation… Never bought a new car.”

Retired teacher Bruce Jackson bought his first house in Albury, in southern New South Wales, in 1984 for $60,000, admitting he couldn’t have afforded to buy in Sydney

Mr. Jackson bought a Holden FB series when he was 17 and still drives that 1960 car

Mr. Jackson bought an FB series Holden when he was 17 and still drives that 1960 car.

The house he bought for $60,000 nearly 40 years ago last year sold for $550,000.

In 1984 the median house price in Sydney was $85,900 and the median full-time salary was $19,656.

With a mortgage deposit of 20 percent, this meant that the average individual borrower would have had a debt-to-income ratio of 3.5.

In 2023, the average house price in Sydney will be $1.334 million and someone with an average full-time salary of $95,581 would have a dangerous debt-to-income ratio of 11.2 even with a mortgage deposit.

That’s well above the Australian Prudential Regulation Authority’s “six” threshold for mortgage stress.

While interest rates hit 18 percent in 1989, the Reserve Bank’s existing 11-year high rate of 4.1 percent would be nearly the equivalent because house prices are so much more expensive relative to incomes.

Millennial Xavier George says boomers are responsible for the problems many millennials face.

“I think if we knew what we knew now, things might have happened differently. But people didn’t buy houses knowing that it would suddenly become a major social problem,” he said.

“I think people followed good financial advice. You know, you have to park your money in houses because it’s well valued. You can rent it out.

“I think the actions of a section of society are not the same as those of the government that made certain policies and made certain things happen. Who know better and should have known better. I think they are two different things.’

Xavier aspires to become a homeowner, and when asked about his expectations in achieving this goal, he gave a clear answer.

“I think my parents must die for that,” he said candidly. Then, with a touch of humor, he added, “You know, let’s hope not. Sorry Mama. But that’s the potential financial windfall I’m talking about. I’m serious about it. For many people, inheriting from their parents is the crucial moment when they can finally buy their own home.’

Despite what he believes has been the right move, the 30-year-old is faced with the reality that more than 30 percent of his income is spent on rent, while at the same time dealing with the burden of a $100 HECS debt. 100,000.

Freelance photographer Ashley Swallow is struggling to break into the real estate market

Xavier George, a renter, believes he has taken all the necessary steps to buy his first home, but it seems his efforts have made no difference in reaching that goal. (Image source: Insight/SBS)

“It’s like you can do the right things. You can go to college and get your degree and you can get the specialist degree, and you can get promotions, and yada, yada. And it almost doesn’t really matter,” he said.

‘On paper I now earn more money than before. But I definitely don’t feel like I’m making more money. You know, the cost of living has just gone up faster than my income.’

Another member of the Millennial generation who has trouble getting into real estate, freelance photographer Ashley Swallow says she’s been held back by the high house prices.

“Owning a house, having a family is definitely something (my partner and I) want to do…but we want a house before we do that,” she told the program.

“But it’s one of those things. It is currently being held back somewhat due to financial circumstances.

‘I don’t want to have my first child at 35. I don’t mind if I buy a house at 35. But starting a family would ideally be sooner. But then everything has to work out to be able to do that.’