Almost half of Australians say they can’t buy a home without help from parents, as rising prices push more buyers to rely on the “bank of mum and dad”.
Almost half of Australians say they can’t buy a home without help from their parents, as experts warn incomes alone are no longer enough to get into the market.
New research from Compare the Market reveals 48 per cent of Australians believe they would be unable to purchase a home without financial support from parents or grandparents, highlighting the growing role of the “bank of mum and dad”.
The survey found 34 per cent of Australians have already received or expect to receive financial assistance when buying a home, most commonly through cash gifts for a deposit or parents acting as loan guarantors.
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But that reliance is under pressure, with 29 per cent of respondents saying they will likely need help despite believing their parents or grandparents cannot afford to provide it.
Compare the Market general manager of money Stephen Zeller said rising house prices and cost-of-living pressures were making it harder for families to support the next generation.
“With Australian house prices having risen so much, the amount of money needed just for a deposit is a significant burden,” Mr Zeller said.
Compare the Market general manager of money Stephen Zeller said soaring house prices and living costs are making it harder for families to support the next generation of homebuyers. Picture: Linkedin
“With the current cost of living and fuel pressures, it’s becoming harder for parents and grandparents to provide the level of support they might have in the past.
“Australians know this, and many are worried they’ll need help that simply isn’t available.”
Azura Financial director Tom Hawley said the figures reflected what he was seeing on the ground.
“Plenty of buyers wouldn’t be able to complete a purchase based on their income alone, and family support is what closes that gap,” he said.
Mr Hawley said buyers were increasingly being squeezed by both borrowing limits and deposit hurdles.
Azura Financial director Tom Hawley said many buyers would not be able to complete a purchase on income alone, with family support often closing the gap.
“You can typically only borrow five to six times your income, so even if buyers can save a deposit, that doesn’t always mean they can afford the property they want,” he said.
For those without access to family support, the pathway into the market remained significantly harder.
“If you don’t have access to family support, the reality is you need to start early and make sacrifices to save a deposit,” Mr Hawley said.
“There’s no real silver bullet to match the advantage of having financial help from parents.”
Despite the growing reliance on family assistance, Mr Hawley said it was still possible for buyers to break in independently.
“We see people every day buying property with absolutely no assistance from their parents,” he said.
“But it does require discipline, planning and a willingness to make sacrifices along the way.”
Maddock Property director Bec Maddock said some buyers are stretching into higher price brackets with early inheritance, with family wealth often filling the gap where incomes fall short.
Maddock Property director Bec Maddock said the divide between those with access to family wealth and those without was becoming increasingly apparent.
“There are absolutely two markets now, those with access to family wealth, and those without,” she said.
Ms Maddock said some buyers were stretching into higher price brackets with the help of early inheritance or financial support that was not always visible.
“You can look at some buyers, a husband and wife, and wonder how they suddenly afford an $8m home. The income doesn’t stack up. Family wealth is playing a role,” she said.
More Australians are turning to family support to secure a home, as saving a deposit and borrowing enough on income alone becomes increasingly difficult. Picture: NewsWire / Sarah Marshall
She said more parents were downsizing and gifting funds earlier, effectively bringing forward inheritance to help children secure a home.
“For first-home buyers, the biggest issue is saving a deposit. It’s incredibly difficult without help,” Ms Maddock said.
The Compare the Market data also showed 42 per cent of Australians planned to buy without financial support, while 26 per cent said they did not intend to enter the property market at all.
The findings come as housing affordability continues to tighten across Australia, with rising property prices and cost-of-living pressures making it harder for many would-be buyers to get a foothold, particularly those without access to family wealth.
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