House help is a de­mand too far

Kapi-Mana News - - WHAT’S ON - ROB STOCK MONEY MAT­TERS rob.stock@fair­fax­me­

We’ve been treated to a run of news sto­ries about young peo­ple who’ve bought homes in their 20s, most with the help of their par­ents.

I like to see peo­ple get ahead, and I con­grat­u­late these young peo­ple, es­pe­cially on their good for­tune to be born to par­ents wealthy enough to help them.

These sto­ries must make painful read­ing for less for­tu­nate young peo­ple, and for par­ents un­able to help their off­spring into homes.

It seems on top of ev­ery­thing tra­di­tion­ally ex­pected of par­ents, the pres­sure is on for them to help their young ones avoid a life­time ren­tal serf­dom in the city of their birth.

Here are the four mes­sages par­ents in high house-price cities might take from these ar­ti­cles on young home-buy­ers.

Two are all achiev­able, one a stretch, and the other all-but im­pos­si­ble.

I rate each one on a one-10 ‘‘doa­bil­ity’’ scale.

Sci­ence shows chil­dren with self-con­trol grow into wealth­ier adults. Par­ents, it is your job to in­stil self­con­trol in your young ones. You also need to avoid rais­ing a lily-


Raise chil­dren with self-con­trol Teach them how money works Help them find their ed­u­ca­tion suc­cess liv­ered nar­cis­sist who be­lieves they are owed some­thing by life. As young peo­ple who can’t af­ford homes are find­ing, the rest of the coun­try doesn’t feel it owes them an af­ford­able home. Rais­ing un­spoilt chil­dren is em­i­nently doable, so I’ll say 10/10.

I’ve met peo­ple who bankrupted them­selves to buy, or rent in the ‘‘right’’ school zone, or who spent their re­tire­ment sav­ings ca­pac­ity on pri­vate school­ing. The mes­sage is clear though: Chil­dren must suc­ceed in ed­u­ca­tion as in our mer­ci­less econ­omy the least-skilled work for peanuts on in­se­cure con­tracts. To have any chance of own­ing a home, chil­dren must be helped by their par­ents to achieve, whether to be­come a skilled tradie, or higher ed­u­ca­tion-trained pro­fes­sional. Takes time, and a lot of ef­fort. I’ll say 8/10.


We dan­gle mas­sive loans in front of 17 year-olds and ex­pect them to make ra­tio­nal de­ci­sions. It’s like we ‘‘grown-ups’’ all think we were mod­els of fi­nan­cial rec­ti­tude at 17! The re­sult is over 100,000 loans in de­fault. Call­ing the bor­row­ers traitors, id­iots, or bludgers isn’t help­ing. Par­ents, it is im­per­a­tive your chil­dren are ready to make the stu­dent loan de­ci­sion. By 17, they must be im­bued with the fi­nan­cial facts of life. Stu­dent loans must be kept small. That means study­ing from home, so you need to raise chil­dren you can bear to be around, and who can stand liv­ing with you. Op­ti­misti­cally, I’m go­ing for 6/10.

And now the big­gie. Par­ents, you may have thought it was tough enough to save the vast sums needed for your own re­tire­ment. Well, you now need, it seems,


$50,000-$100,000 to help each of your chil­dren into a home. For many new par­ents the chance of that is 0/10. This is an ab­surd pres­sure for young par­ents to feel. We need a hous­ing mar­ket where or­di­nary hard­work­ing peo­ple can buy homes.

At least if par­ents man­age the first three, their chil­dren will be in a po­si­tion to make their way in the world when/if hous­ing san­ity re­turns, or move­some­where more af­ford­able.


Will this lit­tle mite need a gift of $50,000-$100,000 to get onto the hous­ing lad­der?

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