As home ownership continues to drift out of reach for many, new research has found that almost half of Aussie first home buyers are relying on their parents for money.
The Domain First Home Buyer Report found that a staggering 40 per cent of first home buyers receive some help from their parents, as house prices continue to skyrocket.
That help could include a cash gift towards the deposit or purchase price, assistance with mortgage repayments, an offer to be a guarantor for a loan, or even support such as allowing children to live at home for longer while they save.
This is a huge increase in the number of people asking for help from their families. In the 1980s, only around 15 per cent of first-home buyers received such support from their parents. Economists say such figures mean that, from November 2022 to November 2023, parents have spent more than $2.7 billion on the property market.
“Many are so far off their dream of buying their first home as it’s now so challenging,” said Domain chief of research and economics Nicola Powell.
“As a result, we’re seeing an increasing reliance on the bank of mum and dad, or even the bank of grandparents, to help them, especially in the most expensive capital markets.
“We’re now seeing detailed home data that the loan-to-value ratio has shrunk, so it seems a big chunk of the first-home deposit is being supported by family members.”
A financial boost can seriously help those trying to save too. A study from the Australian Housing and Urban Research Institute and University of Sydney found that a gift of $10,000 or more made a first home purchase as much as 90 per cent more likely.
However, it also found that if a person had not bought a home by their early 30s, they were far more likely to remain a renter for life.
All this comes as the Parliamentary Library has found the annual income to afford a house is now 1.6 times that of the average Australian wage, and millions live in financial stress just to try and keep a roof over their heads.
With governments failing to build enough houses to plug the gap, it looks like more of us will have to settle for those mouldy rentals for longer — so make sure you keep your inhaler handy.
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