In the past, getting a good job and trying to save money was the best way to climb the ladder of Australian property. Nowadays, however, it all depends more on the wealth of the parents and where they buy the property.
According to News Corp Australia, the latest data shows that more and more young people need to rely on their parents' banks and inheritance to achieve their property dreams.
Digital Finance Analytics research released this week shows that among first-time homebuyers, the percentage of first-time homebuyers receiving household assistance has risen from 3% in 2010 to 59%.
A McCrindle report also shows that nearly two-thirds of Australians believe that most young people can only enter the property market through financial support from their parents.
Research by Seer Data and Analytics has found that heritage values average more than $2 million in many capital cities. In parts of Sydney and Melbourne's inner city, the highest amount of inheritance is at nearly $4 million.
Much of this wealth comes from family housing, which has reached astronomical prices due to soaring house prices over the decades. Experts warn that those who do not have access to this wealth are increasingly being excluded from the housing market.
Graham Cooke, a mortgage expert at Finder, also said bluntly, "Parents who own property give their children a lot of privileges. ”
"The biggest challenge for most homebuyers is getting together a down payment, and while house prices continue to rise, if parents can help, it's often quick to get a down payment and those who can't get that help are struggling."
Martin North, head of Digital Finance Analytics, said homebuyers who are fortunate enough to have help from their parents tend to crowd out those who struggle alone.
According to PropTrack, house prices have risen by almost 40% since the start of the pandemic in early 2020. During this period, it was almost difficult for down payment savers to keep up with the rate of house price increases, as wages grew relatively slowly.
Even if the Reserve Bank of Australia decides to raise the cash rate again, house prices are expected to continue to rise. Loan Market broker Youeil Shol said first-time homebuyers getting help from their parents is one way to overcome the current challenges.
At the same time, experts warn that parents should also ensure that they have enough cash to cope with retirement while helping their children.
Adnan Glinac, managing director of life insurance and superannuation at Australian Unity, advises parents to provide assistance only if their adult children are able to keep up with the repayments.
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