Aussie First Timers continue to find creative ways to secure the homeownership dream.
By Vicky Edema
First Home Buyers have been in the headlines again over the past few weeks, with the ever-present challenge of housing affordability at the forefront of discussion.
On October 26, 2014 The Sydney Morning Herald reported that more Australian parents than ever are stumping up large sums of money to help their adult children into property.
A similar article appeared in The Australian on October 25, quoting La Trobe Financial Chief Executive Greg O’Neill who suggested that around 35% of first home buyers are assisted either formally (via contract) or informally, by their parents. In the same article, John Symonds of Aussie Home Loans said he believed the figure to be at least ‘one in four’ (25%), if not more.
It’s hard to be precise when it comes to this emerging trend in home buying because while lenders and brokers can provide a great deal of anecdotal evidence to support the case, formally recorded data is not currently available. And it stands to reason that these “family partnerships” (not recorded as First Home Buyer purchases) are having an impact on the figures we’re seeing for First Home Buyers, which over the course of 2014 have been recorded at all time lows.
With deposits so hard to save for, and because house prices remain high (especially in our capital cities and along the Eastern Coast) this new generation of home owners is finding less traditional methods of entering the property market, seeking help from their parents in the form of a gift, a loan, a guarantee or asking parents to join the mortgage as co-borrowers.
But while parental support is becoming an emerging trend in Australia, it is not new in other countries. The National Housing Federation (NHC) says that in the UK for example, two-thirds of First Home Buyers get help from their parents.
In Australia lenders are beginning to meet the market, with products being especially tailored to this new type of buyer. For more information, contact us.