Families “shelling out” more for first home buyers
Families are “shelling out” more to help their kids get on the property ladder than they were five years ago, according a survey conducted by ME Bank.
The recent online questionnaire found a large number of families were dishing out an average of $42,000 to help their loved ones secure a home loan deposit, up by $15,000.
This insight comes as Prime Minister Malcolm Turnbull told an ABC radio presenter earlier this month that wealthy parents should “shell out” for their kids in an off-the-cuff remark. Turnbull has since defended his comment and the Liberal government’s decision to leave negative gearing unchanged in the 2016 Federal Budget.
ME’s head of home loans, Patrick Nolan put the emerging trend down to the “challenges of house prices, which have risen steeply over the last few decades”. He also added that this was at the expense of people’s retirement.
“It’s becoming increasingly difficult for parents and grandparents to help family members buy a first home while protecting their own retirement plans,” said Nolan.
The ME Bank study revealed that for 28% of those who had helped out a family member financially in the last five years, it had affected their level of comfort in retirement.
Coinciding with this research, results from a REST Industry Super survey depicted a millennial generation struggling to buy a first home. Out of 1,000 young Australians interviewed, 87% felt owning a home was important, even though 80% were not on track to buy a house and 52% considered such a purchase unattainable.
Tips for young people on buying a first home:
- The first thing you’ll need to do is save up a decent size deposit. Start by reading this guide on how much lenders will need from you in savings.
- Boost your chances of home loan approval by working on or acquiring a clean credit record. If you have debts, pay them off sooner rather than later.
- Avoid switching careers just yet. If you want to buy a home, you’ll need to show the lender at least two month’s worth of payslips, as well as your last group certificate.
- When you’re ready to get your pre-approval organised, pay a visit to our home loan comparison hub and make those first home dreams come true.