New data from Jarden economists estimates that around 15% of all Australian borrowers received help from the Bank of Mum and Dad, with many unable to buy a home without parental financial support.
Real estate agency BresicWhitney also claimed that lending was no longer only for entry-level homes but also for family homes.
“You will probably see it at every auction in the sub-$4 million price point”, BresicWhitney chief executive Thomas McGlynn said.
“I do think it’s played a major role in the price growth Sydney has seen”.
However, Westpac’s Home Ownership Housing Pulse claims that the Bank of Mum and Dad is becoming “tapped out”:
“Interestingly, this [Bank of Mum and Dad] support looks to be coming under some pressure”.
“Just under 60% expect to provide some form of support, up slightly from 57% last year but below the 73% recorded in 2020”.
“This ranges from the outright gifting of a home (9.2%) to some form of direct monetary support (26%) and/or a range of other supports such as providing rent-free accommodation, interest free loans or child-minding that saves on costs and allows for a return to work (24%)”.
“Interestingly, these shares are largely unchanged on 2021 and, in the case of ‘other’ support, materially lower than in 2020 (the reduction centred on ‘rent-free accommodation’ and ‘babysitting’ suggesting that changes in living arrangements and flexible work options have had some impact on responses)”.
“The estimated dollar value of support is, on avg, unchanged from 2021 despite some lift in the share expecting to contribute over $40k. All up, it suggests the ‘Bank of Mum and Dad’ may be becoming a little tapped out for prospective FHBs as well”.
Given the record gap between median home prices and the capacity to borrow, along with the escalation in rental costs, buying a home has become a distant dream without access to the Bank of Mum and Dad.
