Australian millionaire Tim Gurner got everyone’s back up when he said that millennials will have to give up the aspiration of home ownership if they want to keep eating $19 smashed avocado and $4 coffees.
As a 35-year-old real estate tycoon, Gurner has some credibility in talking about the tradeoffs people of his generation need to make in order to be successful. But his comments prompted a series of defensive news stories.
One of my favourites calculated that the average home in Toronto costing $899,728 would need a $179,946 down payment, which would be the equivalent of 12,853 pieces of avocado toast, and take 241 years to save up for.
Clearly, avocado restraint alone is not going to address this issue.
However, I think Gurner raised a bigger point about how certain cities (in Australia’s case, Melbourne, Sydney and Brisbane) are becoming truly international, and it simply may be unrealistic for millennials to expect to buy an affordable three-bedroom home there. The same may be said about Toronto and Vancouver. Policy makers are in a rush to solve the problem of high housing costs by slapping on new taxes, but that’s not likely to do much to bring down prices for first-time homebuyers.
The good news is if buyers are willing to start small – like their parents and grandparents did – even markets such as Vancouver or Toronto are within reach. Peter Kinch, mortgage and investment advisor with Vine Wealth, explains how. My full interview with him is below.