What does avocado toast have to do with buying a house? The answer: nothing, other than some ‘wise’ financial advice shared by Australian real estate mogul Tim Gurner earlier this week stating young people need to stop burning their money on avocado toasts and fancy coffees in order to purchase a home.
Global News crunched the numbers based on Gurner’s remarks and the average millennial would have to skip their daily avocado toast for just over 3 years to afford a down payment on the average home in Canada, and 11 years in an area like Vancouver.
In this post, I want to provide our young Waterloo Region home seekers the length of avocadoless years required to save up a down payment.
Tim Gurner told 60 minutes Australia that millennials would have to give up their $19 avocado toast to purchase a home. I’m not sure how expensive avocados are in Australia, but I couldn’t believe that cost being true here. I recently took an online trip to Zehrs to discover the true cost of a piece of avocado toast.
The cost of a single avocado is $1.69 and a loaf of 12-grain wholegrains bread is $4.19. Taking into account a loaf of bread has roughly 24 slices and one slice of bread holds 1 avocado (with some slippage) the cost for avocado toast in our region would be $2.10 (tax included).
Now that we have the actual cost of avocado toast in the region, let’s determine the end goals.
We will use the same down payment goal that Global News did, which was qualifying for a Canada Mortgage and Housing Corporation (CMCH) mortgage loan insurance. We will also use the $512,656 average sales price of a home in Waterloo Region, according to Kitchener-Waterloo Association of Realtors.
The result is a required down payment of $26,262.50.
Now for the math part:
$26,262.50 (down payment) divided by $2.10 (avocado toast) equals 12,506 days (rounded up).
This results in just over 34.25 avocadoless years required to save up enough of a down payment for the average home in Waterloo Region.
Ultimately, giving up avocado toast for 34.25 years to save up a down payment seems fruitless to me.