From mortgage lenders to homebuilders, advertisers are desperately trying to convince young Australians to step away from the smashed avo and enter the housing market.
With home prices near all-time highs and home-ownership rates falling fast, ads encouraging naïve, would-be homeowners to buy properties they can’t afford are potentially exploitative, experts say.
Home loan advertisements which play on people’s emotions and desire for home ownership are particularly concerning, according to Consumer Action Law Centre senior policy officer Katherine Temple.
One such example is ANZ’s current “first home loan coach” campaign, which features a couple of would-be homebuyers crestfallen at the million-dollar starting price on their dream home.
Help is at hand however, in the form of an ANZ “first home coach”. The Commonwealth Bank makes a similar pitch.
“What is marketed as home-buying advice, or ‘coaching’, is in fact a glorified sales pitch,” Ms Temple said.
Such ads fail to reveal that mortgage brokers and bankers receive commission based on the size of the loan taken out.
“Purchasing a home is a big financial decision, so having someone you can trust to give you good advice can be helpful, but banks and brokers need to look at the underlying conflicts of interest created by commissions,” Ms Temple said.
A lack of affordable housing options makes young people particularly “vulnerable” to “exploitative” home loan advertising, according to Charles Sturt University ethicist Edward Spence.
“Lying to others by omission of commission is always unethical,” he said.
One of the biggest risks is that first homebuyers will sign up for unmanageable large home loans.
“This advertising plays on peoples emotions and their desire to own their own home,” Ms Temple said.
“It can be easy to convince people they can afford to stretch themselves a little further, when in reality they can’t.”
Young people in the market for a home should “take any so-called advice from bank staff or brokers earning commissions with a big grain of salt”, Ms Temple said.
“Do your own research, and factor in a significant savings buffer when you’re working out what you can afford.”
Rich parents you never had
Another property spruiker to target the young first homebuyer demographic is homebuilder Porter Davis.
It adopted a tongue-in-cheek approach to the difficult situation most millennial homebuyers find themselves in, by running a ‘rich parents you never had‘ competition.
“Aisha and Stuart are rich baby boomers who have reaped the tax benefits that are keeping young people out of the housing market,” the website states.
“Now, they’re giving back to the society that has given them so much.”
The great Australian dream of home ownership “really has become a nightmare” for young people, Porter Davis marketing manager Shaun Patterson said.
“If you don’t have rich parents to help you out, life is really tough right now,” he said.
Short for affordable luxury, ‘aflux’ is a term coined by property developer Viapac, with luxury-loving yet financially frugal millennials in mind.
Promoting a new residential apartment building in West Melbourne, Viapac development manager Daniel Stiller said the company was aiming to create “luxury residences which will be affordable and within reach for a lot of people”.
Apartments start at the “affordable” price point of $1.295 million.
Risk of backlash
First homebuyers pose a challenge for advertisers, according to Martin Grimmer, executive dean at the Tasmanian School of Business and Economics.
“The level of affordability in major cities is not particularly high, and the amount of money required for a deposit is much more than it was 10 or 20 years ago,” Professor Grimmer said.
Ads targeting young first homebuyers also risk backlash if they’re perceived as condescending, Swinburne University’s Customer Experience and Insight Research Group co-director Sean Sands said.
“Rather than seeing a supportive message, [millennials] could see it as a condescending message and look to other providers,” he said.
“The reality is that it’s hard to get into the home market.”