Last weekend, Mr Salt wrote a column for The Weekend Australian Magazine, in which he suggested that young people can’t afford homes because they are spending their money on “smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more”.
He commented: “[H]ow can young people afford to eat like this? Shouldn't they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.”
The column has been met with outrage and ridicule from young people, first-home buyers, and the general public alike, with several articles parodying the comments (see I Stopped Eating Smashed Avocado and Now I Own A Castle and the BBC’s article calculating how many breakfasts you would have to forgo to afford a deposit in different cities), and leading to several cafes to offer half price smashed avocado to customers to help with the home loan.
However, ME has also benefitted from what is being referred to as ‘avocado gate’, with its most recent ‘Have your smashed avo and eat it too’ campaign seeing an upsurge in activity.
'Interest has exploded'
Speaking to Mortgage Business, ME’s head of home loans, Patrick Nolan, said: “For ME, we certainly have been considering housing affordability and the challenge that customers face in that area for a long time.
“We launched the [avocado] campaign last week with the insight being that first-home buyers particularly say that they want to really keep their lifestyle and get their lives, so we're trying to tap into that and smashed avocado is, if you like, a representation of lifestyle.”
He added: “We can’t claim responsibility for Bernard Salt’s comments over the weekend, where he said that people would be better off if they didn’t pay $22 for smashed avocado or those 'luxuries', as he sees it, and instead save that for their first time deposit.
“But interest has exploded since then with our avocado campaign on Facebook and Twitter … because a lot of first-home buyers were agitated by those comments. They really do want to try and keep their lifestyle and find a way to save for that home as well, so they want to have that balance.”
Mr Nolan said that although it is “a bit too early to tell” what the impact on home loan settlements will be (“because, as I'm sure you've heard from brokers, it takes a bit of time to work through the home loan process”), there has been a 500 per cent increase in hits on the campaign landing page and a 300 per cent increase in mentions across social media platforms this week.
“That highlights that it's a topical conversation and particularly first-home buyers are buying into it and interested in it,” he said.
The avocado campaign centres around ME’s new property search tool that helps buyers have a home but “keep the lifestyle (plus the smashed avocado)”.
The Life&Loan tool operates online and suggests real-time property listings based on the lifestyle that buyers like to live, followed by borrowing power, and in areas they may not have considered.
The tool allows users to enter details such as net household income, favourite suburb, dwelling type and top lifestyle interests such as cafes, restaurants, parks and gyms etc. The in-built calculators then make some assumptions about the user’s budget, which can be fine-tuned in an interactive pie chart, if required. Finally, the tool compares the user’s favourite suburb with others that are similar but better suit their budget.
Recommendations include real-time property listings and lifestyle highlights, e.g. cafes, parks and gyms.
Property listings are supported by Domain, average expenditure by Australian Bureau of Statistics and lifestyle filters by Google Maps, Google Places and the Government Schools Database.
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.