Australians aged 18-24 years have abandoned the notion of owning many of life’s necessities in favour of renting, loaning and swapping due to lack of affordability, according to a major study of consumer spending trends.
The American Express Future of Consumer Spending survey found the change in attitude of Australia’s younger generation reflects the ever increasing cost of living – according to the Consumer Price Index, the cost of housing rose 5 per cent, domestic holiday travel and accommodation 3.8 per cent, and automotive fuel 2.1 per cent in the December 2010 quarter.
The survey revealed Gen Y, more than any other generation, is less likely to purchase items that have a high cost, become dated quickly, or aren’t used very often. These results are supported by statistics from the Mortgage and Finance Association of Australia, which reveal nearly three-quarters of Australians under 30 years of age are concerned about the level of debt they will be committed to when purchasing a property.
“The economic instability of recent years has had a significant impact on the lifestyles of the young Australian consumer. Combined with the rising costs of living in Australia’s cities, Gen Y has been forced to find creative alternatives to experience products rather than buying them outright,” said Rachel Stocks at American Express.
“Gen Y are hiring, swapping and sharing all kinds of products, from electronics and white goods to fashion items, to avoid making the capital expenditure on expensive items that date and depreciate quickly.”
The shift can also be attributed to the notion that young Australians have a desire to keep their life flexible, the survey indicated.
“The (under 30s are) an experiential generation. They’re changing jobs more frequently than any generation in the past, and they’re also travelling more. They’re an options generation,” said Melbourne-based social researcher, Jeff Gilling.
Rachel Pinchbeck, a 20-something living in Sydney, personifies what it is to be a Gen Y, purchasing goods for resale online and swapping and sharing clothes with her siblings.
“I’m a big follower of fashion but I’m constantly looking for value for money to maximise my retail dollars. It’s all about being savvy and for me that translates into scouring markets to find bargains which I know I’ll easily be able to sell on via eBay.”
According to the American Express survey, retailers must re-evaluate their services and create more options for young consumers to engage with brands and services without necessarily purchasing for the purpose of ownership.