Survey points to rising reliance on parents and grandparents as affordability worsens
More than a third of Australians have received or expect to receive family financial support to buy a home, according to a new survey.
The Compare the Market poll found that 34% of respondents had used, or expected to use, help from parents or grandparents when purchasing a property. Among those surveyed, 48% said they could not buy without that support. For existing homeowners, the figure rose to 61%.
The findings suggest that family assistance remains a key factor in the housing market, but that capacity to provide support is tightening. About 29% of respondents said they would need help from parents or grandparents, but believed their family members were unlikely to be able to afford it.
A further 26% said they would not need assistance to buy a home, while another 26% said they had no plans to purchase a property.
Deposit support was the most common form of assistance. About 14% of respondents said they had received money as a gift towards a deposit. A further 9% said a family member had acted as guarantor.
| Most common forms of financial help from parents or grandparents when purchasing a home | |
|---|---|
| Form of financial help | Australia |
| Family/parental guarantors | 9% |
| Gifting money to go towards a deposit | 14% |
| Lending money for the deposit on the agreement it gets paid back | 7% |
| Offering rent-free living while saving | 7% |
| Joint purchasing of the home | 4% |
| All other forms of financial help | 8% |
| Bought / will buy without support | 42% |
| Don’t currently own a home | 24% |
| Source: Compare the Market | |
The survey also found that family support was not limited to home buying. Some 37% of Australian adults said they had received financial help from parents or grandparents for other living costs. One in five said they received occasional gifts for large expenses, while 16% said they had received loans from parents on the basis that the money would be repaid. About 5% said they received regular contributions towards recurring costs.
“With Australian house prices having risen so much, the amount of money needed just for a deposit is a significant burden,” said Stephen Zeller (pictured right), general manager of money at Compare the Market. “With the current cost-of-living and fuel crisis, it’s going to be hard for any parent or grandparent to perhaps provide as much support as they would like to their children.
“Australians know this, and the survey revealed almost a third need the help but are worried their parents or grandparents won’t be able to afford it.
“This is why it’s crucial for any prospective buyer to talk to a broker and compare their home loan options. Saving on interest rates or finding a property with a loan-to-value-ratio that works for your budget can help you reduce the costs of your mortgage – and thus reduce the reliance on the bank of mum and dad.”
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