Alastair has over 15 years academic and professional experience in international and local property markets. He began his career in Belfast as an investment property buyer and development manager after completing a BSc Hons degree in Estate Management at Heriot-Watt University in Edinburgh.
Attention all Parents !
What can you do to help your kids enter the property market in 2018?
In the words of John Lennon from the Christmas classic “another year over a new one just begun”. The property market remains strong and many parents out there are wondering if their kids will ever leave home or indeed be able to afford to buy in such a pricey market.
With a further increase in property market values last year more and more young people are turning to their parents for financial assistance to help them purchase their first home.
2017 saw statistics released which showed that the ‘bank of Mum and Dad’ are now the fifth largest lender behind the ‘big 4’ banks.
The recent change in stamp duty savings for first time homebuyers has had a positive effect on those trying to enter the market but in many cases it has been somewhat moderate.
How parents are financially assisting their kids?
- Letting kids live at home while they save
- Gifting the deposit or a lump sum contribution to their deposit for a loan
- Buying on behalf of or in partnership with their children
- Assisting with loan repayments
Unsurprisingly the two most common of these are allowing kids to live at home while they save for a deposit and secondly gifting financially towards the deposit.
Whilst it is admirable to see parents supporting their children to secure the home of their dreams we would advise treading carefully with further property advice. This particularly applies to the style of property you recommend your children purchase and in what areas or suburbs. The property market has changed significantly over the past 20 or 30 years since many of you may have purchased your first property.
Is it important to ensure you and your children have a long term goal in mind. For example it might be better to buy an apartment in a sought after inner city location today in order to build equity whilst also allowing young people to enjoy all of the accessibility and enjoyment that being close to the city brings.
It can be a scary thought getting involved financially with your children especially with such a large price tag that property brings.
If you can afford to do so however you can be helping your children shape their futures by using a sound springboard to carry them forward. The Australian dream of owning your own home need not be something of the past, there are many strategies and ways in which to invest or buy a dream home for your children as long as there is a plan in place.
If you feel that you could benefit from professional, independent property advice, please feel free to contact The Property Bureau on +61 3 9018 7870.
Book a meeting online with one of our advisors