Mr De Silva is living at home with his parents since coming back from his overseas trip.
Mr De Silva is living at home with his parents since coming back from his overseas trip.

Decision that cost $30k home deposit

When it comes to saving for a house, parents have been nagging their kids for years to cut back on luxuries to save for a deposit.

But more and more millennials are turning their nose up at the "Australian dream" and spending their hard earned money on experiences - from overseas travel, to luxury items and the latest and greatest in technology - rather than a mortgage.

Druvi De Silva spent his savings that were originally intended to go towards a house deposit on an overseas trip instead.
Druvi De Silva spent his savings that were originally intended to go towards a house deposit on an overseas trip instead.

At 30 years old, Druvi De Silva was well on his way to reaching his house deposit goal. With $30,000 in the bank, which he'd saved up through smart moves in the share market as well as a few social sacrifices, it wasn't until midway through 2017 that his priorities took a sudden change.

Mr De Silva no longer wanted to follow what he saw as a "safe decision" in life and buy a home. Rather, he wanted a challenge - and an experience that would change his life forever.

"The main reason I made the decision to travel was because it was far more challenging to me than buying a house," he told news.com.au for Cash Confessions Travel, a series of stories that look at the way Australians save and spend their money on holidays.

"The safe decision is what parents often tell you to do … have a good job, buy a house and settle down … for me, I didn't want that."

Mr De Silva says more young people should travel instead of worrying about a house deposit.
Mr De Silva says more young people should travel instead of worrying about a house deposit.

Mr De Silva decided to head off on a trip abroad to the Americas, venturing to the north, central and south over the course of 10 months.

It was a trip he didn't entirely skimp on - opting to spend money eating out most nights and paying for accommodation alone - but it was a decision Mr De Silva said more young Australians should consider rather than buckling under the pressure to be a first homebuyer.

"When I made the decision to leave work and spend my savings on a holiday, I didn't get a single person say I was doing the wrong thing," he said.

"In fact, everyone was extremely supportive and said it was a brave call to make.

"I thought people would say, 'Think about what you're doing' … but even family were really supportive."

Druvi De Silva spent his savings that were originally intended to go towards a house deposit on an overseas trip instead.
Druvi De Silva spent his savings that were originally intended to go towards a house deposit on an overseas trip instead.

In the final lead up to the Australia election, the Coalition announced a First Home Loan Deposit Scheme to help young buyers trying to enter the property market.

The scheme, announced on Sunday, essentially means first homebuyers will no longer need to save for a 20 per cent deposit, and will instead need just 5 per cent with the Commonwealth stumping up the difference.

The scheme will be available for single people earning under $125,000, and couples earning a combined salary under $200,000, a commitment which Labor matched over the weekend.

In research released earlier this year and prior to the Coalition's scheme announcement on Sunday, Canstar analysis revealed those hoping to buy a median priced house worth about $1 million need to be on an individual wage of $160,611, if the borrower paid a 20 per cent deposit upfront and avoided paying mortgage insurance.

This equates to earning the pay packet of a paediatrician ($179,250) or an MP ($184,840) just to avoid mortgage stress, according to 2015/16 figures from the Australian Bureau of Statistics.

Prime Minister Scott Morrison announced on Sunday a First Home Loan Deposit Scheme if elected. Picture: Gary Ramage
Prime Minister Scott Morrison announced on Sunday a First Home Loan Deposit Scheme if elected. Picture: Gary Ramage

On Tuesday, Channel 7's Samantha Armytage and David Koch questioned how young Australians were still going overseas and buying "leather couches" rather than saving their money.

In a Sunrise discussion with social commentator Jane Caro, and Seven broadcaster, Ben Davis, the panel were discussing new research that showed 43 per cent of Australians aged 20 to 24 still live with their parents for financial reasons.

Ms Caro discussed how the younger generation today now needed around a decade to save for a house deposit, while previous generations needed just six years to save up and buy a home.

It was at that point Mr Koch jumped in and commented on young Australians still being able afford to certain lifestyle luxuries, despite not moving out of home.

Druvi De Silva thinks he spent around $20k during his 10 months abroad.
Druvi De Silva thinks he spent around $20k during his 10 months abroad.

Intrepid's Annual Travel Index - which looks at the latest trends and insights in the adventure travel industry with Australians tourists - Professor Joseph Cheer from the Center for Tourism Research at Wakayama University in Japan said the age of travel is changing, with consumers placing more value on experiences than materialistic belongings.

"This is the age of travel, where consumer shifts see the hoarding of material possessions increasingly making way for the desire to have extraordinary life experiences, especially through travel," Prof Cheer said.

Now 31, Mr De Silva, who has been living with his parents since returning home from his travels, said many of his friends had followed the path of buying a home and settling down with family, however doesn't feel like his time abroad has put him behind in any way.

"I'd be lying if I didn't think, 'Damn, I could've bought a house (if I didn't go overseas)', but with that thought comes every experience I've gained," he said. "And with that, I have not an ounce of regret with what I did.

"My friends who own houses, they have families and so it makes sense for their situation (to buy a house) whereas it's not what I need or want at the present moment.

"I will forever recommend people do what I did and travel. It's something everyone should think about experiencing … because a house doesn't get you that experience."

Have you made a similar financial decision to Mr De Silva? Perhaps you have gone on a life-changing holiday? Tell me about it: vanessa.brown@news.com.au


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