The Majority Of People Now Get Mum And Dad To Help Buy Their First House
tl;dr get some rich parents.
It kinda feels at the moment that there's never been a worse time to try to get into Australia's booming housing market for the first time.
That's where this graph comes in: it shows that for the first time, more than 50% of young Australians are relying on their parents to give them money to buy their first home.
Not only are half of Australians relying on mum and dad for money to buy their first home, on average they're getting more than $83,000 in help.
The DFA research also found that in recent years that parental help has come ever increasingly in the form of "help with deposit", with parents acting as "guarantor" on the loan steadily decreasing.
Soos said, yes, interest rates are lower now than they were in the 1970s, but there are a number of factors prompting first home buyers to reach out to their wealthy parents for help.
"Rising prices results in a larger deposit (think about a 20% deposit on a Sydney house worth a median $1 million), interest rates on savings accounts are too low to assist with accumulating a deposit, a deposit lower than 20% attracts lenders mortgage insurance which can be around $10-15k, rising underemployment and record low nominal wage growth (the lowest since WWII!)."
It's a trend that's endorsed by the prime minister Malcolm Turnbull. In the national debate around housing affordability and negative gearing, Turnbull joked to a radio host he should "shell out" to help his kids buy a house.
Here's how it played out:
Turnbull: "Are your kids locked out of the housing market?"
ABC host: "Yes"
Turnbull: "Well you should shell out for them. You should support them, a wealthy man like you"
ABC host: "That's what they say"
Turnbull: "Yeah exactly, see you've got the solution in your own hands…"