Parents pay the price too

Millennials looking to make headway into the property market are not the only ones feeling the pinch. Spare a thought for their parents who, by default, are postponing their retirement plans to support their offspring for longer while they battle Australia’s housing affordability challenge.

The younger cohort, unable to deploy independent means to get on the housing ladder, are increasingly reliant on their parents to help them flee the nest. As such, baby boomers are becoming accustomed to the “new normal” of dipping into their savings, often in the form of home equity, to fund their children’s futures.

Some are stumping up the deposit, or using their own home as collateral. Others are subsidising mortgage repayments and, increasingly, more parents will extend the family home, repurposing the garage or remodelling outbuildings to provide their offspring with some semblance of independence, even if it’s just an illusion. We may even see a higher adoption of the European practice of the inter-generational household.

We are certainly entering the era of the “cubby house syndrome”, one that lends new meaning to the term “family money” and one that will see parents and their offspring destined to stay on very good terms

– for the very long term.

Lisa Claes, CEO international, CoreLogic