Being a member of Generation Y sure ain’t cheap.
According to a new study by credit card big-wig American Express, Australians aged 18-24 have been priced out of owning assets that previous generations took as a given. Instead, they’re opting for the more wallet friendly renting, loaning and swapping.
The American Express ‘Future of Consumer Spending’ survey found that, as the cost of housing, domestic travel and accommodation, and fuel has risen, Gen Y has reined back on big-ticket buys.
Melbourne-based social researcher Jeff Gilling attributed Gen Y’s not-so-much attitude to mortgages and the like to their penchant for job swapping and travel.
“They’re an options generation,” he said
Consumer Price Index findings suggest they’re wise to be cautious – in the December 2010 quarter alone the cost of housing rose 5%, domestic travel and accommodation rose 3.8%, and automotive fuel rose 2.1%.
The survey’s results are further backed by stats from the Mortgage and Finance Association of Australia. The organisation’s number crunching shows that nearly three-quarters of Australians are concerned about the level of debt they need to commit to in order to purchase a property.
American Express’ Rachel Stocks said recent economic upheaval teamed with rising costs has forced Gen Y to get creative with their spending.
“The economic instability of recent years has had a significant impact on the lifestyles of the young Australian consumer,” she said.
“Gen Y are hiring, swapping and sharing all kinds of products, from electronics and white goods to fashion items, to avoid making the capital expenditures on expensive items that date and depreciate quickly.”
“Combined with the rising costs of living in Australian cities, Gen Y has been forced to find creative alternatives to experience products instead of buying them outright.
American Express believes that retailers will need to re-jig their services in order to remain relevant to Gen Y. The whippersnappers need options if they’re to engage with brands and services, while purchasing may not be the ultimate end goal.