Nicole Haddow is a Melbourne-based journalist and the author of Smashed Avocado, the story of how she cracked the Aussie property market (and how you can too).
Buying her first home led Nicole to become passionate about helping people enter the property market. She was the executive property writer for the Australian Financial Review. She documents alternative methods of purchasing your first home on her blog, Smashed Avocado.
Today, Nicole will be answering a few questions about her book and why she thinks home ownership is still a worthwhile investment today – check it out!
Tell us about your book, Smashed Avocado!
NH: In January 2018, I started a little blog called Smashed Avocado, with the aim of empowering young people to enter the property market. I’d purchased a home in 2014 and it and it had been tough, but I’d learned so much along the way. I knew if other people had this knowledge, maybe they’d begin to believe they could crack the market, too. The blog generated some interest and led to the book.
Can you tell us a little bit more about the title?
NH: In 2016, demographer Bernard Salt wrote an article for The Australian that suggested millennials should perhaps give up smashed avocado if they ever wanted to own their own home. The article went viral and the jokes about renting and going out for brunch still get tossed around today. I spoke to Salt for the book to get an updated perspective and he had some interesting insights. Ultimately, I believe it can be possible to save a house deposit without giving up smashed avocado (you just can’t have it all the time!).
What is the biggest challenge you faced while writing this book?
NH: Writing the book was the easy part! It was living through the years of saving and that first difficult year of home ownership that posed the biggest challenge. It was hard to revisit some of those memories and think about just how lonely it was to live in a foreign suburb while managing a mortgage for the first time. Writing about those times was also cathartic, though. It helped me to realise just how far I’d come.
Where did your passion for helping people to enter the property market come from?
NH: When I was struggling to pay for everything that came with home ownership, I took up a side hustle writing executive property listings for The Australian Financial Review. Each night I’d sit in my little apartment and write about the most extravagant homes in the country. I thought a lot about how the media kept feeding young people ‘doom and gloom’ stories and I wanted to do something about it.
Prices are high, but it’s important not to give up. Home ownership provides security, particularly in retirement. I wanted young people to put it back on their agenda and believe they were in with a chance.
Why do you think home ownership is still a worthwhile investment today?
NH: Our society isn’t set up for renting into retirement. If you don’t own you own home when you retire, how are you going to rent and live on a pension of $22,000 a year? What would you do if you were 70 and your landlord told you your lease was up? It’s scary stuff. We may have seen the end of the booms and mightn’t see huge capital growth in our properties as fast as in previous years, but if you can purchase a property, you secure a roof over your head and there’s no investment more valuable than that.
What is the one thing that you think everyone who is looking to enter the property market right now should know?
NH: You don’t need a 20 per cent deposit! It’s possible for a first home-buyer to get a loan with a deposit between five and 10 per cent. You will need lender’s mortgage insurance, but it’s built into the cost of the loan. In my case it was about $7000, but I bargained the price of my apartment down, effectively cancelling out the LMI. And, I got into the market faster than I would have if I’d waited to save 20 per cent.
The key, however, is to choose a suburb and a property that you think has opportunities for growth, because buying with less than 20 per cent does have some risks if the market values fall. The biggest barrier to entry is saving that lump sum, so work out what the minimum might look like and power-save your heart out.
Do you have any predictions for where Australia’s housing market is going to go in the near future?
NH: No one can predict the future of Australia’s housing market. I don’t think we’re going to see the massive spikes we’ve seen in the past. However, in major cities such as Sydney and Melbourne, where populations continue to rise, demand will remain strong. I think we’ll see more people ‘rentvesting’ – purchasing an investment they can afford and renting where they want to live. We’ll also see more regional growth.
What is the one thing you want readers of Smashed Avocado to take away with them?
NH: Buying property is hard. There are parts that will challenge you, but it gets easier and it is worth it. Even if you’re able to secure an entry-level investment, it’s a start and over time you might build equity which enables you to buy something bigger, hopefully where you want to live. The Australian dream has changed, but it’s not over. You might just need to reset your expectations.
Can you recommend any other great books on this topic?
NH: There’s not much out there for aspiring first home-buyers specifically, which is why I wrote the book. But there are some great resources for young people trying to get better at managing their cash. I like Unf*ck Your Finances by Melissa Browne.
And finally, what’s up next for you?
NH: I’m currently working as a freelance writer and I’m looking forward to doing more work that enables me to help young people uncover ways to enter the property market in creative ways. I’d also like to buy my next property… that might take a while though.
How I Cracked the Property Market and You Can Too
The home ownership dream might look different today, but there are inventive ways to make it a reality.
At thirty, journalist Nicole Haddow had unstable income, no financial plan and only credit-card debt to her name. But less than two years' later she was a home-owner. In Smashed Avocado, Nicole explains the steps she took to purchase her own home, alongside detailed case studies of other people who have found ways to enter the property market...