Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
The housing affordability crisis in most Anglophone economies is well-studied and its primary causes are structural rather than behavioural. Understanding them does not make the situation more comfortable but does prevent the misdirection of energy into lifestyle modification as the primary response.
Supply Constraints
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
A weekly avocado toast brunch at a café costs approximately $20–25 in most cities where housing is expensive. Over a year, this is approximately $1,000–$1,300. In the cities where this conversation is most actively had — Sydney, London, New York, San Francisco — a 20% deposit on a median-priced home in 2024 required somewhere between $130,000 and $280,000. At the most favourable end of the toast savings, diverting the full annual toast expenditure to a deposit fund produces the required deposit in approximately 100 to 215 years, depending on the city. This arithmetic does not close the gap. It does not come close to closing the gap. The avocado toast is not, in any version of this calculation, the variable that determines whether a person can afford a house.
The response “but it’s symbolic, representing a whole pattern of unnecessary spending” encounters the same problem when the full pattern is quantified. A comprehensive audit of millennial discretionary spending — café food, streaming services, gym memberships, clothing, entertainment — produces annual figures in the range of $5,000–$15,000 for people in the relevant age bracket, depending on income and location. Diverting the entirety of this discretionary spending to a house deposit produces the deposit in 10 to 28 years, depending on city, during which period the person has consumed no entertainment, no meals out, no gym membership, and no discretionary anything. The deposit, once accumulated, would purchase a house in a market that has continued to appreciate during the 10 to 28 years of saving. The arithmetic closes somewhat — and the patterns of spending do matter for saving — but the claim that lifestyle spending explains housing unaffordability does not survive contact with the actual numbers.
What Actually Explains Housing Unaffordability
The housing affordability crisis in most Anglophone economies is well-studied and its primary causes are structural rather than behavioural. Understanding them does not make the situation more comfortable but does prevent the misdirection of energy into lifestyle modification as the primary response.
Supply Constraints
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
The avocado toast argument, made explicit: young people spend money on small luxuries when they could be saving for a house deposit, and if they redirected those small expenditures they could accumulate the deposit. The version of this argument that involves avocado toast specifically is easy to quantify and the quantification is not favourable to the argument.
A weekly avocado toast brunch at a café costs approximately $20–25 in most cities where housing is expensive. Over a year, this is approximately $1,000–$1,300. In the cities where this conversation is most actively had — Sydney, London, New York, San Francisco — a 20% deposit on a median-priced home in 2024 required somewhere between $130,000 and $280,000. At the most favourable end of the toast savings, diverting the full annual toast expenditure to a deposit fund produces the required deposit in approximately 100 to 215 years, depending on the city. This arithmetic does not close the gap. It does not come close to closing the gap. The avocado toast is not, in any version of this calculation, the variable that determines whether a person can afford a house.
The response “but it’s symbolic, representing a whole pattern of unnecessary spending” encounters the same problem when the full pattern is quantified. A comprehensive audit of millennial discretionary spending — café food, streaming services, gym memberships, clothing, entertainment — produces annual figures in the range of $5,000–$15,000 for people in the relevant age bracket, depending on income and location. Diverting the entirety of this discretionary spending to a house deposit produces the deposit in 10 to 28 years, depending on city, during which period the person has consumed no entertainment, no meals out, no gym membership, and no discretionary anything. The deposit, once accumulated, would purchase a house in a market that has continued to appreciate during the 10 to 28 years of saving. The arithmetic closes somewhat — and the patterns of spending do matter for saving — but the claim that lifestyle spending explains housing unaffordability does not survive contact with the actual numbers.
What Actually Explains Housing Unaffordability
The housing affordability crisis in most Anglophone economies is well-studied and its primary causes are structural rather than behavioural. Understanding them does not make the situation more comfortable but does prevent the misdirection of energy into lifestyle modification as the primary response.
Supply Constraints
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
The avocado toast argument, made explicit: young people spend money on small luxuries when they could be saving for a house deposit, and if they redirected those small expenditures they could accumulate the deposit. The version of this argument that involves avocado toast specifically is easy to quantify and the quantification is not favourable to the argument.
A weekly avocado toast brunch at a café costs approximately $20–25 in most cities where housing is expensive. Over a year, this is approximately $1,000–$1,300. In the cities where this conversation is most actively had — Sydney, London, New York, San Francisco — a 20% deposit on a median-priced home in 2024 required somewhere between $130,000 and $280,000. At the most favourable end of the toast savings, diverting the full annual toast expenditure to a deposit fund produces the required deposit in approximately 100 to 215 years, depending on the city. This arithmetic does not close the gap. It does not come close to closing the gap. The avocado toast is not, in any version of this calculation, the variable that determines whether a person can afford a house.
The response “but it’s symbolic, representing a whole pattern of unnecessary spending” encounters the same problem when the full pattern is quantified. A comprehensive audit of millennial discretionary spending — café food, streaming services, gym memberships, clothing, entertainment — produces annual figures in the range of $5,000–$15,000 for people in the relevant age bracket, depending on income and location. Diverting the entirety of this discretionary spending to a house deposit produces the deposit in 10 to 28 years, depending on city, during which period the person has consumed no entertainment, no meals out, no gym membership, and no discretionary anything. The deposit, once accumulated, would purchase a house in a market that has continued to appreciate during the 10 to 28 years of saving. The arithmetic closes somewhat — and the patterns of spending do matter for saving — but the claim that lifestyle spending explains housing unaffordability does not survive contact with the actual numbers.
What Actually Explains Housing Unaffordability
The housing affordability crisis in most Anglophone economies is well-studied and its primary causes are structural rather than behavioural. Understanding them does not make the situation more comfortable but does prevent the misdirection of energy into lifestyle modification as the primary response.
Supply Constraints
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.
In 2017, Australian property millionaire Tim Gurner told a television interviewer that young people needed to stop buying avocado toast and $4 coffees if they wanted to own a home. The statement achieved rapid virality, not because it contained new information but because it so perfectly encapsulated a specific genre of intergenerational financial advice: the confident attribution of a structural economic problem to an individual lifestyle choice, offered by someone who had purchased their property before the conditions that created the problem existed. The avocado toast discourse has been dead for years and remains somehow undead, periodically resurrected by columnists and opinion pages as a way of discussing housing affordability without discussing housing affordability. This article does the maths, examines the structural causes of the actual problem, and explains why the toast, though delicious and expensive, is not the variable.
The Mathematics of the Claim
The avocado toast argument, made explicit: young people spend money on small luxuries when they could be saving for a house deposit, and if they redirected those small expenditures they could accumulate the deposit. The version of this argument that involves avocado toast specifically is easy to quantify and the quantification is not favourable to the argument.
A weekly avocado toast brunch at a café costs approximately $20–25 in most cities where housing is expensive. Over a year, this is approximately $1,000–$1,300. In the cities where this conversation is most actively had — Sydney, London, New York, San Francisco — a 20% deposit on a median-priced home in 2024 required somewhere between $130,000 and $280,000. At the most favourable end of the toast savings, diverting the full annual toast expenditure to a deposit fund produces the required deposit in approximately 100 to 215 years, depending on the city. This arithmetic does not close the gap. It does not come close to closing the gap. The avocado toast is not, in any version of this calculation, the variable that determines whether a person can afford a house.
The response “but it’s symbolic, representing a whole pattern of unnecessary spending” encounters the same problem when the full pattern is quantified. A comprehensive audit of millennial discretionary spending — café food, streaming services, gym memberships, clothing, entertainment — produces annual figures in the range of $5,000–$15,000 for people in the relevant age bracket, depending on income and location. Diverting the entirety of this discretionary spending to a house deposit produces the deposit in 10 to 28 years, depending on city, during which period the person has consumed no entertainment, no meals out, no gym membership, and no discretionary anything. The deposit, once accumulated, would purchase a house in a market that has continued to appreciate during the 10 to 28 years of saving. The arithmetic closes somewhat — and the patterns of spending do matter for saving — but the claim that lifestyle spending explains housing unaffordability does not survive contact with the actual numbers.
What Actually Explains Housing Unaffordability
The housing affordability crisis in most Anglophone economies is well-studied and its primary causes are structural rather than behavioural. Understanding them does not make the situation more comfortable but does prevent the misdirection of energy into lifestyle modification as the primary response.
Supply Constraints
The core driver of housing unaffordability in most cities with expensive housing is a constrained supply relative to demand. Zoning laws, planning restrictions, heritage protections, neighbourhood opposition to density, and the political incentives of existing homeowners who benefit from rising property values combine to produce a chronic undersupply of housing in desirable locations. The economics here are straightforward: when supply cannot meet demand, prices rise. The avocado toast does not affect the zoning laws of inner-city Sydney or the planning commission of San Francisco.
The Investment Property Phenomenon
In many markets, housing functions as an investment asset as well as shelter, and the investment function competes with the shelter function in ways that are predictably unfavourable to first-time buyers. In Australia, tax incentives including negative gearing and capital gains discounts make residential property investment financially attractive, concentrating housing ownership in fewer hands and reducing the stock available to owner-occupiers. The person competing with investment buyers for a property is not losing because of their café spending. They are losing because the investment buyer has different financial characteristics and different tax treatment.
Wage Growth and Price Growth Divergence
The ratio of median house prices to median incomes has expanded dramatically since the period in which the previous generation purchased their homes. In most Anglophone cities, this ratio roughly doubled or tripled between the 1980s and the 2020s. The person who tells a young person to simply save harder for a deposit is comparing the savings challenge of the current moment to the savings challenge of the moment they purchased their property — which was a meaningfully different challenge in most markets. The income-to-price ratio was more favourable, interest rates followed a different trajectory, and the entry price relative to typical earnings was substantially lower. This is not presented as a grievance but as a structural explanation: the difficulty is real and is not primarily created by toast.
The Useful Conversation the Toast Discourse Isn’t Having
Rejecting the avocado toast argument does not mean that personal spending patterns are irrelevant to financial outcomes. They are relevant, in the specific and limited sense that spending habits affect savings rates, and savings rates affect financial positions over time. The honest version of the conversation that the toast discourse is failing to have is not “skip the toast and buy a house” but something considerably more nuanced and considerably less viral:
Individual spending optimisation, applied consistently over a working life, can meaningfully improve financial outcomes for people whose incomes are sufficient to support it — but the improvement is primarily at the margins, and the structural conditions of housing markets operate at a scale that individual behaviour modification cannot meaningfully address. A person who saves diligently and skips the toast will be in a better financial position than the same person who doesn’t, at the same income level, in the same market. They will not be in a position to purchase a median-priced home in an expensive city if their income does not support it regardless of the coffee and toast.
The practical question — for someone whose goal is home ownership — is not “should I skip the avocado toast” but a series of harder questions that the toast discourse successfully avoids: What income is actually required to support a mortgage at current prices? Is that income achievable in my current career path? Is the city I want to live in one where my income can support home ownership, or should I factor in geographic flexibility? Are there structural advantages (parental wealth, inheritance, shared purchase) available to me that would change the calculation? These questions are less amusing than the toast comparison and considerably more useful.
What Actually Helps (If Home Ownership Is the Goal)
This section will not tell you to skip the toast. It will tell you the things that the evidence suggests actually affect whether someone can achieve home ownership, for people for whom it is possible at their income level in their market:
- Income matters more than spending at the margin. The deposit gap for most expensive cities is so large that the primary variable is income rather than discretionary spending. Spending optimisation helps. Career development that increases income helps more. The return on investment of a skill or qualification that produces a $10,000 annual income increase is approximately $10,000 per year, indefinitely. The return on investment of skipping the weekly toast is approximately $1,300 per year, with an annual limit. The income side of the equation deserves more attention than it receives in the toast discourse. For the companion piece on investing in yourself in ways that have actual returns, see our piece on the realistic economics of career choices.
- Geographic flexibility changes the calculation significantly. Housing affordability is not uniformly distributed. Markets that are unaffordable on median incomes in the city centre may be more affordable at the periphery, in smaller cities, or in regions with different economic profiles. The decision to anchor to a specific expensive city because it’s where you currently live is a legitimate choice — but it is a choice, and it has housing affordability consequences that are larger than any number of avocado toasts.
- Structural advantages are more significant than the discourse acknowledges. Research on intergenerational wealth transfer consistently finds that parental wealth — the “bank of mum and dad,” gifts toward deposits, inheritance — is a more significant predictor of early home ownership than any individual saving behaviour. People who have access to this assistance are in a categorically different position from people who don’t, and the discourse that attributes this difference to lifestyle discipline misunderstands the mechanism.
- The decision about whether to pursue home ownership is legitimate to revisit. Home ownership is culturally constructed as the default aspiration in most Anglophone economies, and this construction is not financially neutral — it produces investment in overpriced markets by buyers who might be better served by renting and investing the difference in diversified assets. The rent-versus-buy calculation is not universally favourable to buying, particularly at prices and interest rates prevailing in expensive cities in recent years. The decision to rent, invest the deposit money, and not pursue home ownership is a legitimate financial choice that the avocado toast discourse, by framing home ownership as the obvious goal and spending as the obstacle, tends to obscure.
The Honest Conclusion About the Toast
Eat the avocado toast. Or don’t — it is expensive and you could make it at home for $4. But eat it or don’t eat it based on whether you like avocado toast and whether your budget supports it, not based on whether abstaining from it will produce a house deposit. It will not produce a house deposit in any housing market where the deposit problem is structural rather than behavioural, which is most of the expensive housing markets where this conversation is happening.
The housing affordability problem is real, is experienced as a genuine constraint by a large number of people in expensive cities, and is primarily a policy problem rather than a lifestyle problem. It is produced by decades of constrained supply, tax-advantaged investment demand, stagnant real wages relative to asset prices, and the political economy of existing homeowners who benefit from rising prices and who vote. None of these things are fixed by skipping brunch. Some of them could, in theory, be fixed by changing zoning laws, reforming investment property tax treatment, and building more housing — changes that are politically difficult precisely because they redistribute wealth from existing homeowners to renters and future buyers. The avocado toast argument is popular because it is simpler, more vivid, and more personally actionable than “change planning law.” It is also substantially less accurate as an explanation of the problem. For more on the gap between individual financial effort and structural financial outcomes, see our piece on the side hustle economy. Browse the Financial and Life Philosophy archive for more.
Currently eating avocado toast? The housing crisis will be ongoing when you finish. The toast did not cause it and skipping it will not fix it. Consider the income side, consider geographic flexibility, and consider writing to your planning authority. Browse the Financial and Life Philosophy archive for more financially honest content, including our upcoming piece on budgeting like a pro until you see something shiny.