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Australian parents are willing to do it tough so their children (and grandchildren) can get a foot on the hard-to-reach property ladder, a new survey has shown.
The 2018 Generational Property Ladder Survey, commissioned by homeloans.com.au, has found that from delaying retirement and sacrificing luxuries such as a new car or a holiday to dipping into their savings, parents are making both personal and financial sacrifices on behalf of their generations to come.
The survey revealed that almost two in three parents (65 per cent ) were either currently making financial and personal sacrifices for their children and/or grandchildren to help them buy a home, or that they plan to in the future.
In addition, of those parents willing to provide financial assistance, more than one in four (29 per cent) were prepared to retire later than planned. This is aligned to recent reports by the Australian Bureau of Statistics (ABS 2017) which revealed a current trend of later retirement despite a growth in superannuation.
Head of marketing at homeloans.com.au Will Keall said that the survey highlights the great lengths parents will go to.
“Due to tougher mortgage lending standards, it’s increasingly difficult for younger generations to break into the property market,” Mr Keall said.
“To help with this, parents are doing what they can to help their children become first home buyers, from cutting back on their own spending to going guarantor on a loan.”
Extra
Mr Keall said that the survey shows just how much more parents are prepared to do for their kids.
“It’s commonly known how difficult it is for first home buyers to get into the market, particularly in popular metro areas, and we’re seeing parents are prepared to go the extra mile for their children or grandchildren,” the marketing head said.
“If parents are able to help financially by giving cash or going into partnership on a property, that is clearly the fastest way to help a first home buyer onto a ladder. However, providing support to help your child save, such as by allowing them to move into the family home temporarily or acting as guarantor on a loan, will also help them to own a home sooner.
“One idea for parents with adult children living at home could be to charge them board, and then invest the money to put towards a deposit. Not only does it give the kids a financial boost, it also helps them learn the discipline of saving.”
Sacrifice
The survey also shows that nearly two in five (39 per cent) were willing to live more simply by sacrificing small luxuries like going to restaurants or movies, and a third (33 per cent) were willing to delay big expenses like holidays or a new car.
Just under one in three (30 per cent) were willing to dip into their savings, and one in 10 (10 per cent) were even willing to remortgage to free up cash.
Around half of respondents (49 per cent) had given cash to help their children or grandchildren buy a home and 16 per cent had provided an interest-free loan.
Almost 60 per cent would consider a cash gift and 35 per cent an interest-free loan.
Others have helped by way of purchasing a home in partnership with their child, leaving an investment home in their will or letting them stay at home to save money.
More than 45 per cent of parents/grandparents would consider letting kids move into the family home while saving for a deposit.
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