Avocados Pricing Millennials out of Housing in Australia?

[TrophyWife]

Avocado toast in Orange County, CA is around $10 for one slice....it's fancy with little pickled veggies. It's become a "thing" here. And it's so good. And yes, I could make it at home for much less

Avocado Toast
More Avocado Toast

 

[Christine]

So the conclusion must be that we should start looking for an avocado ETF?

 

[karen1972]

Who knows, I'm surrounded by millennials that were able to buy their first townhome, most of them are living with a roommates to save up more money for weddings, homes, etc.

 

[Maenad]

But people will laugh at this article and put the blame elsewhere...like on wages being low, healthcare too high, student loan issues, blah blah blah. Same old story...different day. No one wants to take responsibility for anything. They want everything handed to them.

Why can't it be both their own spending habits and lack of wage growth?

 

[marko]

This subject was brought up in CNBC this afternoon by Kelly Evans

 

[MooreBonds]

If people are scraping by and they're spending $15 on an avocado sandwich...they're also spending money on other things they shouldnt be. They have no budget...they blame everyone else for their money problems, etc etc. God forbid they give up their $100/month phone plan. No way can they give up their $6/day coffee. People need tivo, dvr, 10 tv's throughout house, 10 ipads...gotta have 5 alcohol drinks when you're out...couldnt give that up...no way!

But people will laugh at this article and put the blame elsewhere...like on wages being low, healthcare too high, student loan issues, blah blah blah. Same old story...different day. No one wants to take responsibility for anything. They want everything handed to them.

+1.

Fact-checking a mogul's claims about avocado toast and millennials

I find it interesting that the article glosses over obvious issues with how they pretend to show that there "isn't anything wrong with Millenials' spending habits":

people from 25 to 34 spent, on average, $3,097 on eating out. Data for this age group through the decades was not readily available. But the bureau's report indicated that this group spent $305 more than people from 55 to 64 — a group that encompasses some baby boomers — and $89 more than the overall average, including spending among people ages 35 to 54.

The truth is, even if millennials assumed the eating-out habits of baby boomers, it would take around 113 years before they could afford a down payment on a home (assuming a 20 percent down payment on the median price for a home in the United States, $315,000 in March 2017, and a one percent yearly yield rate).

The article ignores that the average household income for the 55-64 cohort is likely far greater than the 25-34 cohort. They try to say that restaurant spending is "only" $305 more - but that's 10% more, and with a likely much smaller income. I'm sure their technology budgets are also, likewise, "only" a little more than boomers'.

And again with travel:

Millennials spent $4,832 per year on vacations, just below the $5,078 by Gen-Xers and $5,012 by boomers, according to MMGY Global's Portrait of American Travelers in 2016. The study surveyed 2,948 adult travelers with annual incomes over $50,000.

They simply put them all in a category of "incomes over $50k". Again, odds are, the average HH income of Gen-X/Boomers is greater than the millenials', yet the travel budget is almost the same. But we don't know because the study doesn't clarify more specifically with income (I'm willing to bet that they cut it off at a simple "$50k or more" because it fit their narrative better - I can't understand why you would take a survey about travel with such a low "max income" bracket)

Those in an older age bracket likely have home equity and other investments at their current age and can likely more easily afford to spend more in eating out and travel. Also, they likely didn't live to the extent and relatively excess that the current 25-34 age group when the boomers/Gen-X were that age.

 

[Gumby]

If I lived in an area where I could raise an avocado tree in the back yard I would do it.

Right next to a fig tree!

So the smart millennial would buy an avocado ranch or orchard or grove or whatever they call it (with a house) and then sell the avocados to finance the house.

 

[Greencheese]

So the smart millennial would buy an avocado ranch or orchard or grove or whatever they call it (with a house) and then sell the avocados to finance the house.

What about living in an avocado treehouse? I'd say your house would then truly make you money!

 

[target2019]

$22 AUD is just $16.37 USD today! Not so bad?

I think the main point being made by RE dude in the article is that his millennials are throwing away much of their capital on fads, every day. Throw in a large coffee, and it is serious money each week. At the end of year, an empty bank account and lots of debt.

 

[audreyh1]

I just see it as a big pile on. It smacks of the age old "young people today are so screwed up in their priorities" meme. As if other recent generations were far superior at the same age.

And I found the almost obsessive focus on avocados as the main anecdote to be comical! Some folks like to illustrate and use anecdotes instead of coming out and clearly stating their point, and in this case IMO it weakens the author's and quoted millionaire's argument by making it appear they have blown things out of proportion.