Can You Buy A Home When Price Are 10x Your Salary?
For Lady Bosses who want to smash the property game.
How's a woman supposed to afford a place around here? Source: WIix.
As a working woman of the world, getting into your late 20s-30s can be great: no more feeling like you must be at ‘da club’ on a Thursday ‘til 3am (or even at a bar on a Friday ‘til 6pm, let’s be honest. House Hunters to watch, shiny new vacuums to buy online…) You’ve hopefully moved up a rung or two on the corporate ladder (hopefully being the operative word here #JuniorAt31), and you’ve finally found the haircut that works for your face shape. But this stage of your life also comes with inevitable downers and expectations – suddenly pasta at lunch doesn’t go through the metabolism as fast as it used to and is apparently now a ‘sometimes’ food, so you need to ‘work out’ to ditch the fat (read: hard pass), you’re expected to magically understand the difference between cheap and expensive wines at restaurants that charge $35 for some sort of Asian Fusion device, and everyone around you is suddenly buying a house. Seriously. Everyone! You stop and ask yourself -when did mortgages and interest rates become Saturday night chat? Hard to pin a date, but it’s probably around the same time Saturday nights went from the 3 am shoving of your tongue down a stranger’s throat to a dinner party where the host asks you to Venmo the $11.64 pp she spent on the Rotisserie chicken, but that’s another topic. The point is, sometimes you can feel like you got left behind in the rat race and like you will never be able to save up enough for a deposit for A Room of One’s Own. (Yeah, I’m using it in my own context, shoot me).
Rule #1: Stop comparing yourself to others
Saving when you’re in a couple is hard enough – full disclosure, I’m in one (don’t worry, there's no shmoopys here. He is handy at making said pasta, though). But when yet another one of my girlfriends proudly announced that she and her partner had purchased a home (#ygg), I started thinking about those in our group who had and had not entered the housing market. And it was very clear from my solely anecdotal evidence that, even with respectable careers in law, marketing, accounting and so on, it was mainly the Sassy Single Ladies who had been left behind on the Impossible Property Chain. But why? And what can be done about it -and not in an advertorial or unachievable, but truly real way - for Lady Bosses to not just enter, but smash the Property Game? We know some of the statistics already, and they’re worse than the last episode of How I Met Your Mother (still not over it. Can you tell?) The gender pay gap means we earn roughly 15% less than men across all careers, less Super, and have less confidence in demanding more money or promotions that afflicts the working Australian woman.
A deposit can seem unachievable. We’ve all entered a friend’s house and wondered how they could afford a new place, a Dyson, and still serve up the branded brie. If only you saved more, worked harder, chose a different career (although admittedly, the summer I wanted to ‘Freelance from home’ that turned into watching Ellen re-runs while shoving string cheese into my mouth as a reward for a hard day’s work probably wasn't advancing my property portfolio aspirations as much as I thought). The point is, don’t beat yourself up. Legit. You needn’t have done Maths Methods in Year 12 to figure out that two incomes are better than one (take that, the 49.5/100 I got for Basic Maths in Year 11. I couldn’t even argue my way out of it a la everyone’s hero, Cher from Clueless. Maths isn’t subjective. If it’s 49.5, it’s 49.5. You can see why I didn’t follow a path into statistics…) The point is, obviously, two people means splitting costs on bills, shopping, deposits, furniture etc. So, don’t look at couples and blame yourself for not being able to save like them. It’s not the same. I know that. It’s an uneven playing field, and unless you’re earning double what a couple does (#ygg), like Betty White racing Usain Bolt, whilst entertaining, it’s not comparable. So, go with your New Year’s Resolution (not the one to stop drinking as much wine- heavens no, the other one) and stop comparing yourself to other people.
What not to do when house searching
Next, I thought of the steps my partner and I have been taking as a couple to buy a home. We’ve heard countless stories of people who buy the first thing they see, only looked for three weeks, were the only bidder, paid undervalue, etc.
First off, I hate you guys. Sincerely. It’s really important to me that you understand that.
Secondly, we have been on the search on and off for about a year and a half, largely because I was out of work, which had its own troubles (totally coming up with other articles here as I go…) Anyway, from personal experience, a list of what not to do when hunting down your Lady Pad (that sounds weird, doesn’t it? It was meant to sound like a female #BDE. It will come to me). Moving on. What I thought worked in the Property Game, but ultimately:
What doesn’t help:
Spending $300 at Seed on ‘rich lady vibe’ pants and shoes to wear to auctions in the hope you’ll scare everyone off by looking like Ca$h Money. You won’t, and your boyfriend will wonder why instead of being a rich lady, there’s a load of cash outstanding on your credit card statement.
Asking friends and colleagues to donate to The Human Fund for Christmas. I didn’t get the big deal. When my best friend asked for money to support her walk for Oxfam, she’s a hero. When I ask for money for a house with a walk-in-closet, I’m a monster. I’m so sick of society and its double standards.
Marching into inspections and declaring loudly that it needs a 'his and hers' sink or a marble bench-top after watching too much House Hunters from your 'Freelancer Business' days, and going on and on about what you’d do to upgrade the place in an effort to sound knowledgeable so that the real estate agents won’t scam you. This isn’t Flip It Like Disick, and no one cares that you would put a secret entryway behind the library in the West Elm of your un-affordable Toorak apartment (although, who am I kidding? Everyone wants to know about that).
What actually helps:
Can we all be real for a second here? These days, you’re pretty hard-pressed to find anyone who was able to buy a place, on their own, who didn’t get help in some shape or form. The people who smugly say they bought a place over the weekend, filter their Insta pic in front of a big ‘SOLD’ sign, and take all the compliments after saving from The Bank of Mum and Dad. (I’m just jealous, obviously. I’d LOVE to be a member of that bank. If you run this bank, adopt me, pls). Nearly everyone who buys has:
Inheritance/Financial support from family
I know, not everyone can. But if you’re offered, this is fine. More than fine. Brilliant, actually. We’d all take it if we could, so if you can, invest that bad boy in some bricks and throw pillows from Mecca for good measure (Mecca obviously meaning the Holy Land, Kmart, not make-up. Or both. It’s your life. Viva la Vida).
Shaking up with the parents for a bit
Now. Will it suck? Of course, particularly if you’ve lived on your own for a period of time without anyone asking if your special ‘friend’ is sleeping over, making inane chit-chat after work when Brooklyn 99 is beckoning, and asking you to sit at the table for dinner (I’m in my 30s. If I want ice-cream for dinner, I’m fucking having it! It’s called adulting). But if you are lucky enough to have this option where you can pay minimal to no rent or bills, the savings can be enormous. Case in point: If the average rent in Melbourne is $1125 a month, if you don’t have to pay rent at home, that a massive $13500 in savings in just one year. If no bills, (average to $270 a month) that’s an extra $3240. Stick it out for two years (I know- can you stay at that mate’s lush house for a bit?) and you’ve got just over 33K as a deposit for an apartment (I mean, probably a pretty shitty one. Melbourne prices suck. But it’s yours!) Plus, I’ve heard living with your parents means you don’t have to do draining life tasks like cooking or laundry (Can I just say, totally can’t relate. Growing up, you knew my mum had cooked when the fire alarms went off after another round of toast and eggs for dinner, and the one time she washed my clothes when I was 13, she turned them pink. Enraged at her lack of order and efficiency, in Year 7 I immediately took over as Household Manager. As an adult, I realised that her dreamy reply to any and all household chores of ‘I would, but I’ll just stuff it up’ whilst filing fingernails was actually a fantastically conceived, deceptively delicious Power Move that I shall pass onto my own daughters one day. What a boss. Love you Mum).
Try some small changes to start
Okay, you scoff, that’s great for the elite who come from money or families they can stand, but what if you ain’t got none of that? Fair call. It can still be done. Look into small changes you can make. They seem so insignificant (omg, if someone tells me how much I’d save ‘just bringing lunch in’ one more time, I’ll crack. Fuck off Susan, if I want the $12 bagel on a Monday, I’m bloody well stress eating it) but if you want that place, look at:
· Your transport Can you walk/cycle with the morning running freaks and not PT? PT and potentially catch corona but not drive? PT with the scum and not private Uber? PT is vile, but ride-sharing and driving does add up.
· Your weekly shop Can you ditch the brands and go no-name, buy in bulk, and look into buying things like your medication, make-up, and clothes from no-name brands? (the entire Gucci marketing team just gave my details to a sniper at Interpol for that).
· Other shopping Look into great shopping finds for your house and wardrobe in places like op-shops, Facebook Marketplace, and online cheapo houses. (Note: if on Facebook marketplace, don’t be like me. I’m one of those – I like to potter through anything and everything, decide I need a $250 gold peacock statue that takes up the same amount of space as a small child, message ‘Is this available?’ they say ‘Yes, when can you pick up?’ and I promptly ignore the conversation and carry on with my life).
*Do the hustle
Did anyone else immediately get the Hustle song from Sister Act 2 in their head? ‘Do the hustle…money, money, money –MONEY! No? All good, lucky me.
Yeah, we’ve all heard it before. Drive for Uber, paint houses on your weekends, start a business. Realistically, some of these are hard – I mean, my car is 2008, so Uber is out (sidenote, so off them banning my beloved Nissan Estelle from business. Just another sign of ageism in the industry). I’m not exactly handy – by choice (it just sounds so dull compared to watching RuPaul), and starting a business sounds like effort. I want a house, not an investment into fax machines and Accounting 101 online. So, I get it. But are there other ways you can make a bit of dosh on the side? Like:
· Babysitting, pet sitting, house sitting Yes, other people’s children are obviously ghastly, but as long as they’re alive at the end, you get paid, so just put on The Bachelor, give them their milk and we’re all g.
· Your special skill Are you creative? Can you offer your skills on Airtasker or freelancing to write, draw, consult, sing, make, cook, drive, build, help?
· No skills? No problem Have you considered Phone Sex, becoming a Webcam Girl or being a Gun for Hire? (Jokes. Only the last one though, really. Use your femininity for ca$h monie$ if you want girl. We’ve all thought about it at least once, be honest. But alas, I am no J. Lo).
Seriously. I would’ve done this, but my partner wants to act like he’s going to suddenly get handy and finally use the drop saw he got for Christmas that’s been collecting rust outside for the past five years. Madness. (Also, I like saying ‘rent-vesting’. It makes me feel modern and financially savvy when I casually drop it into water cooler conversation). The point is, take the emotion out of it, and just be smart. Realistically, unless you dream of living in a tent in the bush, no one can afford to buy where they want to live (even the Royals had to pay it back, hey Sussexes? Jokes. I love them. Don’t talk shit about Lady Boss Megsy Markle in front of me). But I digress. Renting where you like and investing your money into cheaper property in an up-and-coming area is a great way to get your foot in the market at a much cheaper price, without sacrificing your latte lifestyle. Consider looking rural or even interstate to find a property within your range – just make sure you could afford the repayments and/or a property manager for if you ever got stuck.
Utilise all the benefits out there
Even though a place in Melbourne now costs almost 10x the average wage when in our parents’ generation it was 2-3 (although, they didn’t have Amazon Prime, so...even?) there are some good benefit schemes out there. Our government doesn’t believe in climate change (cringe), but you should take advantage of some of the young peeps housing deals they’ve set up to get you into your bricks and mortar: · The First Home Super Saving Scheme Whilst the title doesn’t exactly roll off the tongue, this is an initiative to let you stash away some cash in your Super to save for a house deposit. It’s taxed less, letting you save more, faster. You can read more here. · The First Home Owner’s Grant This has had a few iterations, but at present, if you meet certain criteria, you can get up to 10K if you buy or build your own place (or get off-the-plan) and up to 20K if you do it regionally. More here. · First Home Buyer Stamp Duty Concessions This one abolishes stamp duty altogether for places under 600K, and concessions on a sliding scale up to 750K. More here.
Draining your life and putting money away
I know. It’s stale. Everyone’s going for Friday night drinks, planning for massages in Bali (the normal kind, not the happy kind. Get your mind of the gutter, this is a heavily researched, informative finance article), and magically all your friends sport a new $150 Country Road tee and freshly bleached balayage every week despite claiming to earn minimum wage with a mortgage and two kids. But look, that’s their super unfair and magical life. Focus on YOU, girl. You don’t have to commit to a capsule wardrobe and never getting that bagel again (Mmm. Bagel...) But, saving ultimately does mean sacrifices. Aside from the big spends (holidays, tech, your guilty pleasure of choice – drunken Fridays on ASOS, anyone?) consider all the little things that add up. Do you really need two weak almond dirty chais with a hint of vanilla daily? (FYI: That’s my actual order, I’m a Melbournian so IT’S FINE). Can you consider a grown-out hair look so you don’t need it done as frequently, but it still looks baller? Can Friday nights out become sultry nights in with a bottle of Aldi wine and $3 brie? (Easy answer: Yes. Yes, they can. No guests required). Do you need Netflix, Stan, Amazon Prime and Disney+, or can you just ask your sister for her passwords and never look back? Some of these savings sound insignificant but consider the total of what we’ve just discussed (well, I’ve discussed. This is my article. You have no lines in this play):
Sis, that’s $14K without really doing shit. Do that for a year along with some other tricks, and we’re looking at a 10% deposit for a baller Room of One’s Own- those starting with a ‘2’ still exist as of 2020, and not in the sticks, either. Plus, so many perks to your own space over us annoying couples – you get to choose all the furniture, art, plants, paint colours, location, what’s on the telly- literally everything. Basically, what I’m saying is, fomo.
Sisters are doin’ it for themselves
Get savvy with your money. It’s 2020, baby. Don’t be one of those women who ‘doesn’t really get finance’ or finds it all too boring or hard. It is, but that’s not the point. Think about what you want, and how you can get it. A five bedder in Toorak? That’s fine hun, but might be time to head to sugardaddy.com, my ranting blog is not the place for you. But if it’s within your sights, like the one-bedder sexy apartment, then put on your brunch lycra; make, don’t buy, yourself a coffee; put on the Destiny’s Child from the Independent Women and Bills, Bills Bills era (what a time to be alive), and spend a morning organising your shit, like:
Make sure you’re with the best Super company for you, and look at all the extra fees you may be paying.
For instance, I realised I was paying a fee for Accidental Death Cover. Whilst the world would obviously mourn, at present I don’t have kids, so I didn’t see the need for this (who would benefit?) and asked to stop paying the fee. Also – consolidate. When we’re young we are scared to say no and go with whatever Super company an employer tells us to, fucking us over royally. No more. Find any lost Super here.
With that, consider adding a bit to your Super each month
Statistically, women retire with a whopping 47% less Super than men, so start prepping for the Florida Del Boca Vista Bridge & Baileys sessions you rightly deserve now. Have a chat with your workplace about adding to this yourself. Also, there can be fun tax deductions attached – win!
Assess your bank
Are you still with the one you got as a pimple-faced teenager on your first shift at Maccas? You can do better, babe. There’s so many now with no fees, ways to organise your money, bills and transactions, you’re just spesh not getting this sorted, pronto. Bank fees = wasted Pottery Barn money. And we all want Phoebe’s Apothecary Table from Pottery Barn. Consolidate that shit and never look back.
Look into your suppliers
Are you getting the best deals for your phone, energy, (you legit get a $50 just for checking on that link), internet, water, electricity? Or are you just a lazy bitch who had it set up by someone else and can’t be fucked looking at it? You can do that, no-one’s stopping you. But it’s a waste, and you a woman of the world! You is kind, you is smart, you is important. No-one else is gonna do it for you. Personally, I froth being the Money Manager. I never wanted to be one of those women who said ‘he’ handles the money. Plus – it combines my two loves, a deal, and being in charge (I suppose one those was meant to be my partner. Whoops). With your finances, you can whinge about it, or look after #1. So, manage your money- and before getting sucked in, understand how comparison websites actually work here.
Consider making an appointment with a Financial Advisor
This may cost a bit, but if you’re really unsure, it could be a great place to start with understanding what you can afford to save and realistically spend. __________________________________________________________________
Overall, it may not happen overnight. Yes, everyone around you may be buying, reports are saying prices are getting higher and wages are lower. It all seems too hard, too un-fun (that's a word now), and unachievable. It is fucking hard, and unfair, draining and annoying. But, if you truly want a place, it isn’t impossible. It may not be overnight, but if you’re a Working Woman of The World, you can achieve it – and finally, with all your own money, with your own shit, with your own food and wall hangings, you can grab that wine, switch on House Hunters International, and smugly be the one to put your feet up and cast your eyes down in your Room of One’s Own. __ Good independent resources: https://moneysmart.gov.au/ https://barefootinvestor.com/ http://www.firsthome.gov.au/ https://www.victorianenergysaver.vic.gov.au/ https://www.privatehealth.gov.au/dynamic/Search https://www.ato.gov.au/Forms/Searching-for-lost-super/ __