A new survey shows Australian parents are willing to do it tough so their children (and grandchildren) can get a foot on the property ladder.
They are making personal and financial sacrifices, from delaying retirement and sacrificing luxuries such as a new car or a holiday to dipping into their savings.
The 2018 Generational Property Ladder Survey commissioned by homeloans.com.au revealed almost two in three parents (65 per cent) are either making financial and personal sacrifices for their children and/or grandchildren to help them buy their own home, or plan to in the future.
Of those parents willing to provide financial assistance, more than one in four (29 per cent) are prepared to retire later than planned. This aligns with recent Australian Bureau of Statistics reports revealing a trend of Australians retiring later despite a growth in superannuation.
Homeloan.com.au’s Will Keall said the survey highlighted the sacrifices parents would make to assist their children to buy a home.
“Due to tougher mortgage lending standards it is 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.”
The survey showed nearly two in five (39 per cent) of parents were willing to live more simply by sacrificing small luxuries such as eating out or going to the movies, and a third were willing to delay big expenses like holidays or a new car.
Just under one in three were willing to dip into their hard-earned savings to provide financial assistance, and one in 10 would even willing re-mortgage 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.
Others had 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.
Kellie Campbell, from Baulkham Hills in Sydney has three daughters. She and husband Liam have an investment property they will make available to their daughters to live in, so they can save to buy a property of their own when the time comes.
“Property prices in Sydney are so ridiculous, we just don’t see how our girls would be able to buy their first home if we don’t do something to help them,” Ms Campbell said.
“We purchased an investment property, which is currently tenanted, but we intend to let the girls live in it if they need to, so they can save.”
National Seniors’ Financial Information Desk (FID) Manager Craig Hall urged members considering assisting children to buy a home to contact FID first.
“Parents and grandparents need to consider a number of financial and legal issues before they go down this path,” Mr Hall said. “They should contact us to discuss these before diving in.”
Members can access the free Financial Information Desk on 1300 020 110 or write to email@example.com.