How the ‘Netflix effect’ is hampering a generation’s Australian dream

For generations, the Australian dream of owning your own home directly on a large plot of land when you retire has been very achievable.

However, with house price increases well outpacing real wage growth, this is becoming less achievable for current young Australians.

But that’s not the only thing standing in the way of today’s generations’ Australian dream, with a cultural shift dubbed the “Netflix effect” also being a factor, financial experts say.

The phenomenon centers around a lack of delayed gratification, especially among young people who prioritize immediate returns over the long-term savings needed to get one rung on the property ladder.

“I think it’s at the core of social change and it’s what I call the Netflix effect,” said Marissa Schulze, a mortgage specialist at Adelaide-based High Rise Financial Solutions.

“As older generations grow up, they’ve had to wait for things, whether it’s waiting until next week for the next episode of their favorite sitcom. They’re coming to learn that good things come to those who wait.”

“But today people are much more accustomed to having everything now and whenever they want, through things like Uber and Netflix.”

This phenomenon can also affect the way people manage their money and plan for the future, he said.

“I think it makes it harder for young people to understand the value of money and saving because they are now used to owning things,” he added.

But he added that he did not believe the Australian dream was unachievable.

“It’s definitely a lot harder for young people to save money for a deposit, that’s the important part, but it’s still possible,” he said.

“I think perhaps as a result of changing ideas and values ​​young people have less realistic expectations of what they want in a first home and are therefore less prepared to own a home as a first step and then trade up.

“But I also think there is a greater need to be more disciplined about saving, and so are many young people.”

It’s a view echoed by Finance Quarter director Sean Lee.

“The Australian dream is possible, but it will certainly look a little different than it has in the past,” he said.

“I don’t think it’s any less realistic, but it does require more planning and is especially difficult to do if you’re on your own.

Mr Lee said there was a need for more education on financial matters and this would “make a big difference”.

“I think social media in particular has created a culture where we want things now, so people can borrow money for a new car or a vacation just because they can afford it,” he said.

“This type of lifestyle makes it much more difficult to save money for a deposit.

“Things like subscription services and gym memberships may not sound like much, but they all make sense.

“We have a ‘I want it now’ society, but it comes at a cost.”

Mr Lee added that there were also economic factors that made the Australian dream seem less attainable.

“The last five years have seen house prices rise between 50 and 100 per cent in some areas, and the average income certainly hasn’t increased that much,” he said.

Peter White, from the Australian Association of Financial Brokers, has been advising people who want to own a home for 47 years and has seen buying habits change and develop over that time.

“If you look back 20 or 30 years, I would say it was just as difficult then (to save for a deposit) as it is now,” he said.

“The biggest difference right now is the cost of living.”

Mr White said potential new buyers may need to be prepared to compromise these days to achieve their Australian dreams.

“You may need to accept the fact that you may not be able to shop in the same area as your mom and dad; you may need to move to a different suburb or somewhere smaller,” he said.

“Saving money in the modern world is quite different and much harder to do than it once was, and there is always something that makes it harder.”

Mr White said he had noticed a change in how keen people were to undertake long-term financial planning, adding: “I think we have become a bit more relaxed and prefer to do things the easy way rather than the hard way.

“The best advice I can give is that people should have realistic expectations about where they want to live and that the best time to save is now.

“It may mean that we have to work several jobs for a short period of time.

“It’s also important to remember that it’s not just the deposit cost that you need to consider, but perhaps an additional 5 per cent or so for other costs.”

Ben Kingsley, managing director of Empower Wealth, stressed the importance of being prepared to “trade in” the property rather than expecting to receive money for your dream home straight away.

“If people want to live in big capital cities the cost will always be higher and it will always be harder to save money,” he said.

“This is a big challenge, especially for your younger generations.

“If you want to live in a city it is much more challenging.

“It’s definitely getting harder and harder to get that deposit.

“But if you lower your expectations, you reduce the amount of deposit you need and you’ve taken your first step.”

Mr Kingsley said preparing to climb the lower rung of the housing ladder would create upgrade opportunities later in life.

“What you find is that people start to become homeowners later in life,” he said.

“A big question is: Is there a sense of delayed gratification these days?

“The truth is, if you want your dream to come true, you have to be ready to give up.”