An increasing number of Aussie parents are putting off retirement and working until later in life in order to help their children – and even grandchildren – get a foot onto the property ladder.
New research has revealed that almost two in three parents (65 per cent) are currently making financial and personal sacrifices for their children and grandchildren, helping them to plan for the future and save for a deposit for their first home.
The 2018 Generational Property Ladder Survey, commissioned by Homeloans, also found that, of those willing to open up the ‘bank of mum and dad’ to help their kids out financially, 29 per cent were prepared to work past the usual retirement age.
Will Keall, Homeloans Head of Marketing, said the survey highlights how far Aussie mums, dads and grandparents are willing to go to help their offspring own their own homes, as that reality becomes even more difficult for younger Australians due to increasing house prices and a declining housing market.
“Due to tougher mortgage lending standards it’s increasingly difficult for younger generations to break into the property market,” he 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 results showed that 39 per cent are willing to sacrifice small every-day luxuries, such as going to the cinema or eating out, to save money, while one third said they would be willing to cut out big expenses such as holidays or a new car. Just under a third (30 per cent) said they would dip into their own savings in order to give their children and grandchildren a helping hand, and one in 10 said they would go as far as remortgaging their own home to free up cash.
The survey also revealed that around half of respondents have given cash to their children or grandchildren to put towards a home, with 16 per cent generously providing an interest-free loan. Others have chosen to help by bequeathing an investment home in their will or allowing their kids and grandkids to live with them while they save.
One family, from Sydney, told Starts at 60, that they have invested in a second property for their three daughters to live in, so they can save for their own homes. Mum Kellie Campbell said: “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.
“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.”
Keall added: “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.”
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