Gen Zer reveals how her HECS debt almost shattered her real estate dreams

A young Aussie has opened up about her “humiliating” experience when trying to buy her first home and the nightmare 24 hours she endured as a result.

Getting an education in Australia is meant to make your life easier, but for Kirstie McConnell, the price of her education almost cost her a chance at buying her first apartment.

McConnell, 26, works full-time in digital marketing, earns $80,000, and recently purchased an apartment in South Port, Queensland, for $365,000.

Thanks to her international business and finance degree, she also has $60,000 worth of HECS debt.

The young worker had been saving since she was 21 to get into the increasingly expensive property market and was finally in a position to buy her first place. She hired a broker to make the transaction as smooth as possible.

Ms McConnell was under the impression that, because she was a first-home buyer, she would only need a 5 per cent deposit, but she saved up $45,000 to be safe.

“I wanted to have wriggle room. The place I was looking to buy was $365,000, and so realistically, I only needed $30,000, but I wanted to be safer and go for more than a 5 per cent deposit,” she told news.com.au.

The Queenslander had done some research online beforehand and knew that her HECS debt would be a problem.

Ms McConnell is one of the many Gen Zers who has been burned by the latest HECS indexation.

She has just bought her first place. Picture: Instagram/ kirstiemcconnell

She knew her HECS could be a problem. Picture: Instagram/ kirstiemcconnell

While there is no interest charged on HECS/HELP loans, indexation is added on June 1 each year to adjust debts according to the consumer price index so they maintain a more real value in line with the cost of living.

Last year millions of Aussies saw their debts increase by a massive 7.1 per cent, meaning that, despite Ms McConnell regularly making payments, her debt hasn’t decreased since she graduated.

“I spoke to my broker and I made it clear that my HECS debt was going to be a problem and that it was going to push the cost out, but with that in mind, he still said I’d only need a $38k deposit,” she said.

When Ms McConnell was given this figure, she felt confident she’d be able to pay the full deposit and have money left over for emergencies.

“Then he went to the actual bank and got confirmation from them on the day that I signed the contract, basically saying, oh, uh, the bank won’t give you that much,” she explained.

She needed to find extra money fast to buy her place. Picture: Instagram/ kirstiemcconnell

She ended up feeling lied. too. Picture: Instagram/ kirstiemcconnell

To buy her apartment, she’d need a $48,000 deposit because the bank wouldn’t lend her more money because of her student debt and the weekly $70 body corporate fees at her apartment complex.

The news left her scrambling. She had already spent a few thousand on sneaky costs associated with owning a property, like getting the title transferred into her name and getting pest control reports on the place.

She suddenly found herself in a position where she couldn’t afford to buy the apartment on her own anymore, and it was down to the wire. She had 24 hours to find an extra $5000.

“I felt like I’d been lied too. How many times did I have to ask? I thought, oh sh*t, I don’t have that money, and it was cutting it so fine,” she said.

She knew the only option was to ask her parents for money, but she said she cried before she made the phone call because she was so “embarrassed”.

“I want to be independent and do everything alone, but to secure the property, I had to ask, and it was humiliating,” she said.

She didn’t want to ask her parents for money. Picture: Instagram/ kirstiemcconnell

Ultimately she did and bought her place. Picture: Instagram/ kirstiemcconnell

Ultimately, Ms McConnell felt she also couldn’t afford to wait and pass on the property in order to save up more cash for the next one because the property market keeps getting more expensive.

“I was so close and didn’t want to get priced out of the property market. The rate at which the prices of properties are going up is insane. That’s why I felt like I had to take this place. If I miss this, is that just going to be it?”

Thankfully, her parents were in a position to lend her $5000, which she’ll pay back when she can afford. However, the 26-year-old doesn’t think that is the point.

She’s frustrated that it has become expected that someone of her age, regardless of their circumstances, will need their parents’ help to buy a place.

“You do all the right things — you go to university, get a good job, go get a property — but you are still on the back foot,” she said.

She said that Generation Z, in general, started life on the back foot because of the current economic circumstances.

“We are on the back foot in our situation. We are paying for university, and we are told we need to go to university. Even at school, you get pushed in that direction. We immediately start our adult lives in debt, and then there is the cost of living and rental prices. Young people are throwing money away on rent because they can’t afford to enter the property market,” she said.

Ultimately, she feels that even though she should be in the perfect position, she still isn’t, and she doesn’t think it is her fault.

“I’d love someone from an older generation tell me what I could have done better,” she said.