New research has revealed that NSW has a dramatically low number of first home buyers receiving financial assistance from parents compared to other states.
Research by national mortgage broking group MoneyQuest has revealed that declining housing affordability is having a multi-generational impact as first home buyers increasingly rely on the financial support of parents to secure their first home.
However, parental support varies widely between states. Nationally, one in five (19.1 per cent) first home buyers receive a cash gift from parents to purchase a home, a figure that rises to 30.7 per cent of first home buyers in Queensland. By contrast, only 1.7 per cent of first home buyers in NSW receive a cash handout from parents.
Among first home buyers who have received financial support from family members, the average cash gift nationally is $41,000. This figure rises to $63,000 among South Australian first home buyers – the most generous handout nationally.
MoneyQuest managing director Michael Russell said declining housing affordability has seen first home buyer activity drop significantly, accounting for just 13.8 per cent of new home loans at present, down from 18 per cent ten years ago.
“The fall in first home buyer numbers is rapidly becoming an intergenerational issue with older parents under pressure to gift tens of thousands of dollars to their adult children at a time when the federal government is urging all Australians to provide for their own retirement,” Mr Russell said.
FHBs are increasingly turning to investment properties, with Moneyquest confirming that that 13 per cent of first home buyers nationally are opting out of buying an owner-occupied home, and choosing to purchase an investment property while continuing to live at home.
This strategy is most prevalent in NSW and Victoria where 24 per cent and 20 per cent of first home buyers respectively are investing in a rental property rather than buying a home to live in.
[Related: FHBs turning to property investment]