One in three need parental help to get onto the property ladder: Survey

One in three respondents to a recent survey who don’t own a home say they need parental assistance to get onto the property ladder.

The survey of 1,006 people nationwide, conducted for non-bank lender State Custodians Home Loans, found 29 per cent of Gen Y aged 18 – 34 say they’re relying on their parents to either gift or lend them money towards the deposit and 26 percent are waiting for their inheritance.

Some 37 per cent consider they will have to move back in with mum and dad to save enough money for a deposit.

Joanna Pretty, State Custodians General Manager said everyone would agree it’s a good idea for adult children to be as financially independent as possible, but the reality is more and more young people are simply not able to get ahead in property without some kind of financial assistance from their parents.

"Whilst new financial year budgetary measures will help first home buyers a little, the reality of scraping together a deposit will still be challenging," she said.

“Being able to salary sacrifice for a deposit from pre-tax pay and use voluntary superannuation contributions up to $30,000 towards a deposit on a home will provide some benefit for some buyers. However, across-the-board first home buyer grants would be far more helpful as far as a lump sum goes.

"Four in 10 respondents (39 per cent) say saving wages from their current job would realistically be the main way they will get the money together for a deposit, whilst 28 per say that money saved from a new, more highly-paid job would get them into property.

"This is a tough challenge, considering that Australian wage growth is currently at a low. The ABS reports that the Australian average annual wage is $78,832, and that the average first home buyer loan across all states to June 2016 was $335,000.

"To come up with a 20 per cent loan of $67,000, a person on the median wage with an after-tax monthly pay packed of $4,434, would need to put aside $1,116 every month for five years. That’s on top of what they’d be paying for rental costs and other expenses, and given that in some cities many loans would be much higher than the average.

“It is definitely tough to buy in metro areas these days, especially if you’re struggling to make ends meet on your current wage.

“The deposit requirements are significant, even if you’re an expert saver. Unfortunately buying your ‘forever home’ right off the bat is not always a feasible or quick option like it has been in the past."

For those struggling to stump up a deposit, and tackle the property ladder Ms Pretty has this advice: 

• Save as much as you possible can for a deposit. It takes sacrifice and real commitment.
• When you are first starting out it’s important to keep your mind open about the type of property that you choose to buy, and the area it’s in.
• Have a plan in mind to upgrade or move to other areas over time, as your budget allows and the property value increases.
• Consult experts to help you with your planning so you get to your dream home sooner