Bank of mum and dad: The five-figure first home buyer deposit
Parents are planning to gift their adult children an eye-watering amount towards a first home deposit, according to research by Finder.
According to Finder's Parenting Report 2023, which surveyed 1,033 Australian parents of children under 12, parents are planning to give their children $33,278 on average to put towards a first home deposit.
That's about a third of the average first home buyer deposit ($96,274) based on the average first home buyer loan of $481,368 in March 2023.
Parents in Victoria plan to extend the most financial help for their adult children to buy a home, gifting an average of $52,716, followed closely by parents in South Australia ($44,656) and New South Wales ($40,191).
However, not everyone is ready to splash out. More than 1 in 2 (51%) say they would give $1,000 or less.
Sarah Megginson, money expert at Finder, said without the help of their parents, plenty of young Australians will be priced out of the market.
"Recent property price hikes combined with interest rate rises have made it extremely tough for young buyers to save a sufficient deposit let alone qualify for a home loan.
"Buying a home also comes with new responsibilities such as managing hefty council rates and strata fees, paying for ongoing repairs and managing your money.
"If parents are in a position to step in to stump up a deposit, it's important for that gift to come with the support of financial literacy too.
"Asking your kids to prepare a household budget will ensure they're equipped to handle further rate rises."
Megginson urged older Aussies to 'put their oxygen mask on first'.
"The risk is that the parents who contribute to their children's property purchase could do so to their own detriment, hurting their retirement fund and potentially running out of money later in life.
"It's important to consider whether you are financially secure before helping family members and that you look for ways to work towards a mutually beneficial outcome.
"For instance, you might pledge to match your kids' home deposit savings dollar-for-dollar which gets them into the habit and discipline of saving, and means you don't have to contribute as much.
"To alleviate some of the stress that comes with buying your first home, Finder has compiled a guide for first home buyers to help with all stages of the process. Looking at all the grants, incentives and waivers available can help save tens of thousands of dollars," Megginson said.
| How much do you think you'll gift your kids to help them buy a home? | |
|---|---|
| New South Wales | $40,191 |
| Queensland | $36,497 |
| South Australia | $44,656 |
| Victoria | $52,716 |
| Western Australia | $31,076 |
| Source: Finder's Parenting Report 2023 of parents of children 0-12, November 2022 |
Start your journey of buying your first home with Finder's guide for first home buyers.