News website editors have stumbled on a perfect way to drive traffic: trolling millennial renters with tall tales of how they too could own a home if only they tried harder. The trouble for Generation Rent is that politicians are ignoring the online outrage because they believe the outrage will stay online – and out of the voting booth.
Bernard Salt, a columnist for The Australian (and a baby-boomer), hit the hottest of hot buttons late last year when he penned a piece on behalf of “middle aged moralisers” about the evils of hipsters who bought smashed avocado on toast.
“I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home?” Salt wrote.
“How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.”
Cue outrage and a swathe of stories pitting baby-boomer landlords against Generation Renters mired in student debt.
The latest version of this trolling kicked off again this month here in New Zealand with a series of articles on both NZ Herald and Stuff profiling young people who were able to buy houses. The implication was that young renters only needed some ambition, some thrift and some hard work and they too could join the hard-working boomers on the property ladder.
One article on Monday detailed the example of two 24 year old Aucklanders who could have a $1 million property portfolio by the end of the year. However, the fine print lower down detailed how they they borrowed 60 percent of the purchase price of their first property and got the rest as a gift from their parents.
Another article last week quoted Auckland landlord, Gary Lin, with his views on what young people wanting to own a home should do.
“If I were 16 years old today, I would join the army and toughen the f*** up,” said Lin, who started his portfolio of 14 properties with a $200,000 wedding gift from his father.
“Success will come when one has developed the rich mindset, rich habits, and has taken action. Complaining on Facebook during work hours will do f***-all to their lives,” he said.
Lin’s comments followed an earlier article highlighting the home ownership stories of millennials. That article generated a backlash from home buyers pointing out the successful home owners got on the ladder more than five years ago, or got help from parents. All these articles generated outrage online and proved a hit on NZ Herald’s most-read lists.
Stuff then got in on the act with its own series of articles about young home buyers who had worked hard and got on the ladder, including this one about a 19 year old who bought a former state house in Palmerston North for $260,000. Another article described a home owner who chose to rent closer to where she worked, while yet another lived at home rent free for a year and used her parents to guarantee a loan.
None of the articles were able to find a young Aucklander who had been able to buy a house to live in in Auckland under their own steam in the last three years. All of those cited had either bought years earlier or had received big help from their parents.
‘Look over there. You’re fine’
But the biggest case of trolling came this week from the Property Investors’ Federation, which produced analysis that it said showed it was actually easier now for home buyers than it was in 1985 because interest rates and tax rates were now lower.
Federation chief executive Andrew King wrote that first home buyers buyers in 2015 were paying 45 percent of their income in mortgage payments, which was less than the 52 percent being paid in 1985 when interest rates were 18.9 percent.
“Commentators who state that it has never been less affordable to get into your first home are wrong and may inadvertently be doing a great disservice to first home buyers” said King.
His comments followed NZ Herald business editor at large Liam Dann saying in a comment piece that young house hunters should just give up.
“Being told that they cannot achieve home ownership is likely to stop potential first home buyers from even trying,” King said, adding that it may condemn youngsters to (a fate worse than death) being tenants for life.
This would be a serious risk for New Zealand because “tenants are likely to be less financially secure in retirement and may require a higher level of taxpayer support,” he said.
The irony of a lobbyist for landlords arguing that tenants would become so financially insecure as to need taxpayer subsidies seemed to pass him by.
The problem with the analysis is that it did not include the effects of student loans on the incomes of first home buyers now, and used national rather than Auckland figures for house prices and rents. It also didn’t take into account what might happen when interest rates normalise higher. Even with that, King acknowledged it would take almost twice as long (seven years) to save a deposit now than it did 30 years ago.
Baby-boomers can relax
Trolling Generation Rent is clearly fun and a great way to generate page impressions, but baby-boomers shouldn’t worry too much about some sort of electoral revolt.
In theory, millennials and Generations X and Y will eventually overwhelm the baby-boomers in numerical terms some time in the 2020s. In theory, if they voted in a bloc they could exact revenge or try to change the equation by introducing land or capital gains taxes, or voting for a Government that launched a massive house building programme. They could also vote for means testing of NZ Super and healthcare for the generation that owns more than $1 trillion in assets.
But that would require Generation Rent to actually become engaged in politics and vote. There are few signs of that.
Labour Leader Andrew Little abandoned Labour’s capital gains tax policy because the ‘missing million’ voters failed to turn up in the 2014 election. Parties with the opinion poll support of more than 80 percent of voters are opposed to a capital gains tax or any changes to the age of eligibility for New Zealand Superannuation for at least 20 years.
An older generation of politicians and voters support resource management rules and infrastructure funding arrangements that are strangling house building rates at levels much lower than during the 50s, 60s and 70s when they were growing up. They refuse to prioritise house building or pay the extra rates or taxes needed to fund the infrastructure to ramp up house building.
But that generation who bought houses in the 80s, 90s and early 2000s can rest easy. There will be no revolt.
Just 49 percent of 18-28 year olds actually voted in the 2014 election and young renters voted at even lower rates in council elections.
Generation Rent are more interested in The Bachelor than in understanding how politicians and voters are working to keep them as tenants.
Trolling is a safe distraction for now.