How my generation ended up homeless

A question that has divided generations and filled up column inches in recent years is why today's young people (the marketers' Generation X and Generation Y) aren't settling down and becoming home-owners the way their parents did.

The most common explanation from ageing Boomers and Builders (the one before them) is that we're feckless and lazy and don't want responsibility. The almost instant retort is that the economic environment has changed and we simply cannot get ahead the way previous generations did (see the review of "Strapped" by Tamara Draut in Popmatters). Houses are too expensive, jobs don't pay sufficiently well and rising education costs are leaving us in debt long before we start earning.

I don't give the first view much creedence, mainly because it's too simplistic for words. There are lazy people in our generation and we are possibly taking longer to get over our adolescence than previous cohorts - but this has been a criticism of young people since Plato's day.

The second view can be supported by economic and statistical analysis and also by looking at structural changes, especially in terms of tax-breaks for investors. The eminently sensible George Megalogenis in The Australian had this to say about house prices and capital gains tax on Saturday:

At first, the boomer frenzy, and the lock-out of Gen X, was blamed on the rush to beat the GST, which was introduced on July 1, 2000. But the boomers kept bidding until the end of 2003, when the party finally stopped. It will be some years yet before twenty and thirtysomethings find housing affordable.

Economic fundamentals have definitely favoured those with capital behind them and who owned property before 1996. This places younger people at a significant disadvantage even before we begin adding to the intergenerational balance sheet.

And yet I don't think this is the full story. I suspect the affluence of our parents has had another consequence - increased expectations.

Many twentysomethings I know are heavily in debt, not because of paying for education or buying houses (both of which are investments and lead to future earnings), but because of "indispensible" consumer goods and services - new furniture, cars, overseas travel.

We can't remember a time when these weren't part of our lives, so we aren't willing to do without. And our parents encourage us by insisting that we buy "safe" cars (read "new") and looking down their noses at our smelly share-houses and frayed furniture. We encourage each other as well. I have lost count of how many times people have advised me to get a personal loan to go overseas or buy a new car when I don't have the cash.

Conversely, Boomers didn't start off at the point we imagine them (as they were during our teenage years) - most "up-sized" their houses and cars over the course of adulthood. My parents didn't leave Australia on holiday until age 42.

It's possibly I'm more debt-phobic than my peers, likely as a consequence of a frugal Scottish upbringing, but surely this state of affairs doesn't have to persist. We are a bit like the heirs and heiresses of literature who borrow against expectations and rack up debts, waiting to inherit the Earth. Which may never happen.

Categories: Talking Books