A high school dropout turned property adviser says reports of a housing crisis are ‘over the top’ and insists it’s never been easier to buy a home.
Jack Henderson, 28, claims to have built a property portfolio worth more than $35million since saving his labourer pay cheques to buy his first home in Sydney at just 18 – three years after he was kicked out of school.
His first first property was a $720,00 two-bedroom apartment in the beachside suburb of Coogee. He saved the money for his deposit while still living at home.
He believes the reason many younger ns are struggling to buy property is because they ‘want everything right now’.
Unlike previous generations, Mr Henderson believes younger people are unwilling to make the lifestyle sacrifices that are required to save money.
‘Of course there are a lot of people doing it tough out there, but I think there is a cost of spending crisis,’ Mr Henderson told SBS Insight on Tuesday night.
‘It’s very easy to spend money with everything at our fingertips, everything’s on our phone. We want the newest of everything.
‘We want our cake and we want to eat it too.’
Mr Henderson’s remarks left several audience members frustrated, but that did not deter him from offering some harsh advice.
‘Everyone can do their bit to try and earn more money and cut what they spend,’ Mr Henderson continued.
‘But to say that there’s a a cost of living crisis I think is a little bit over the top.’
Pressing him further, host Kumi Taguchi questioned Mr Henderson: ‘What would you call it? Lifestyle?’
He answered: ‘We got used to two per cent interest rates and we got used to everything being much more affordable than what it was.
‘You’ve only got to drive down a freeway and look at 90 per cent of the cars on the road and see they’re all new model cars.
‘I’m sure most people in the audience would open their phones up and it’s a brand new phone or one of the newest phones.
‘Those things aren’t cheap and they’re not free.’
I drive a McLaren…
I’m lucky enough that I’m able to drive around in a McLaren (Well I was until I lost my license).
A McLaren is not a cheap car, but I can buy it because I can afford it. If I was earning $80K a year, I wouldn’t be driving a McLaren.
It’s exactly the same thing with houses.
If you earn $80K a year, you don’t walk into a dealership expecting to drive out in a supercar. You buy a car that fits your budget. But for some reason, when it comes to property, people think differently. They feel entitled to live in a $2 million suburb on an $80K salary.
I grew up in Wilberforce, about 70km northwest of Sydney. You can still buy a house there for $800K. If you and your partner both work and earn average incomes, you can afford to buy there. Your repayments might take up 30-50% of your income, which is completely normal. But what do most people say? “I don’t want to live there. It’s too far from the city.”
That’s the real problem.
It’s not that property is unaffordable. It’s that people don’t want to start where they can afford.
No one buys their dream home as their first home. You get in the market, build equity, and step up. That’s how you go from a Toyota Camry to a McLaren. But if you sit on the sidelines waiting for the market to crash, you’ll be walking forever.
Taguchi pushed for Mr Henderson to be more straightforward in his answers and asked him: ‘Why do you think some of us are struggling?’
The 28-year-old replied ‘people struggle in all economies’ but ‘people who keep up with the world will make more money than they ever have, and they’ll probably work less than they ever have’.
He also refuted claims that it’s harder than ever for Aussies to get into the property market.
‘It’s the easiest it’s ever been (to buy a home) with all the incentives that are out there for first time buyers in many states,’ Mr Henderson said.
‘You need a five per cent deposit, you pay no lender’s mortgage insurance, you pay no stamp duty.
‘The only thing easier than that would be giving you a house for free.’
Many audience members looked incredulous with his comments, including economist Evan Lucas.
‘At no point in history have you had to work harder to get that five per cent deposit to actually get to a point that you can then buy a home,’ he explained.
‘Where are you buying this house?
‘Housing price compound interest now has, for most people, blown out for the places that they would want to buy, in the areas that they can work to therefore keep servicing the mortgage.
‘The other difference is those that have assets versus those that don’t has also never been larger.’
Mr Henderson’s views divided viewers, with some commenting online supporting his unvarnished truths.
‘Agree totally. I don’t rely on anyone but myself. I have worked hard for my fabulous retirement,’ one wrote.
‘Good on you for going on the show, would have been tough to do,’ another said.
However, others were unimpressed, with one commenter labelling Mr Henderson’s response as ‘very one dimensional’.
‘Spoken like someone who’s likely experienced minimal adversity in life and lacks empathy for others,’ they wrote.
‘Maybe when we don’t pay so much tax, we won’t be so concerned about what the government does or doesn’t do for us.’