LinkedInFacebook

The younger generation is being increasingly maligned for mooching off their parents. Not fledging the nest on time, reports confirm that nearly 114,000 people in Sydney between the age group of 25 and 34 continue to stay in the family home, unable to save enough money to buy a property amidst the spiralling prices all these years. The picture is the same across Australia, with 25 per cent of people aged 20 to 34 living in their parental home.

 
First Home Buyers
 

Most experts blame this trend on the out of reach housing prices, with nearly one-third young Australians reported to take over five years to save a 20 percent deposit for their first home. What is unfortunate is the fact that youngsters in Australia are turning pessimistic, with the 2017 Deloitte Millennial survey pointing out that only eight percent of Australian youngsters believe they would be financially better off than their parents! Besides, one in third young Australian is reported to be unemployed or underemployed.


Surely, our youth is headed to days of gloom, you would say. But no, that’s not true.

The year 2017 has been a good one for first home buyers, with the Federal Government introducing several schemes including the First Home Super Saver scheme that is expected to boost the savings of first home buyers for a deposit by 30 per cent as compared to a regular savings account. Besides, there are boosted grants for first home buyers in NSW, Queensland and Victoria, helping youngsters get a foothold in the property market quicker.

Parents have also jumped in to help their children find feet on the real estate ladder, lending over $85,000 to their children, on average. At HashChing, we have seen a spurt in inquiries for family guarantee loans, a trend confirmed by mortgage brokers across Australia. This means, apart from letting their children enjoy their hospitality longer, parents are also using their own homes to secure their child’s future (read home!).

Add to that the cooling property market in Australia, with experts predicting a house price growth of 2-4% in Sydney and 7-9% in Melbourne in 2018 compared to the double digits earlier this year, staying at home longer could be good for young Australians who can boost their savings now to turn home owners sooner. Especially with the boom in apartments across the country, coupled with little help from parents and the Government, soon, youngsters could be finding their way out of their parents’ homes into their own abodes.


An end to an era of dependence

The slew of housing affordability measures introduced earlier this year, the low interest rates on offer in a competitive mortgage market and falling property prices amidst tighter restrictions around investment lending could well lead to the end of an era of young adults co-habiting with their parents.

Apart from making a headway into the property market, youngsters who decide to take advantage of the present conditions to foray into the property market could also find themselves richer than their counterparts who stay with their parents much longer. Yes, a
Household, Income and Labour Dynamics survey found that those who left home after the age of 25 earned $6,000 less than those who fled the nest earlier. It further revealed that men ended up $20,779 worse off and women $95,676.
Of course, staying longer than 19 years has its benefits as a youngster takes a little over four years to settle into work life, making 22-23 years of age the sweet spot for going independent.


Seize the moment

If you are a first home buyer waiting to make a kill, may we suggest that you start by assessing your borrowing capacity. Apart from calculating how much you can borrow, assess practically how much can you afford to borrow. This means, you must budget your finances to check what mortgage repayments can you afford monthly (calculate now) before deciding the size of the loan to undertake. Taking help from a verified mortgage broker can ease your journey. A broker will not only help you understand your financial situation better but also lead you to the best-fit home loans for your requirement at competitive rates. You could also start by comparing broker pre-negotiated home loan deals here.

 

By Vidhu Bajaj,
HashChing Content Writer

 

teaser-popup-img.png

HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

We already have your details. Please click here to login.