A report from Redfin found that 38% of recent homebuyers under the age of 30 received family money in order to afford their downpayment. This data is out of America, but the numbers are similar in Australia. A recent Australian study put the number around 40% of 25-to-34 year old homebuyers, while a second suggested it could be as high as 60%.
These are just the latest data points that show how stretched housing affordability is. A separate study from Bankrate found that nearly three-quarters of aspiring homebuyers report that affordability is the number one obstacle to owning a house. (Although the more you think about that study, the more you wonder what the largest obstacle for the remaining quarter of respondents is).
The unaffordability of housing is fast becoming a structural problem in the economy. As more and more first homebuyers require family help, the gap between those whose families can help and those whose families cannot will only widen.
And the pressure doesn’t appear to be easing any time soon. Rising rents is one of the reasons inflation remains stubbornly high and pushing more people to try and buy. High levels of overseas migration is further pushing up demand, while builder bankruptcies and tradie availability have supply struggling to keep up. And even 13 interest rate rises in 18 months haven’t stopped house prices returning close to all time highs. In the meantime, a generation of Australians are feeling priced out of the housing market.
No wonder more and more young people are needing to turn to their families for help.
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