There has been a marked decline in the proportion of Gen Y borrowers who expect to have to ask their parents to help them buy their first home, according to the 2012 National Savings and Debt Barometer compiled by RaboDirect.
Just over a quarter (26%) of Gen Y respondents surveyed in May this year by RaboDirect said they would need to get assistance from their parents to purchase a house or apartment, compared with more than a third (35%) in 2011.
Generation Y refers to those people born in the late 1970s and early 1980s.
This increase in first-home buyer confidence comes with interest rates falling and affordability improving.
The most recent rate cuts have sparked a rush of new home buyers in Melbourne and Sydney’s suburban housing estates and apartment market seeking to claim government handouts and rebates before the June 30 cut-off date.
From October 1 NSW first-home buyers will be incentivised with a $15,000 handout from the O’Farrell government if they purchase or build a new home.
According to the RaboDirect, the findings suggest that more Gen Ys are feeling more financially independent from their parents – “possibly helped along by a softer housing market”.
The survey also found a small rise in the proportion of baby boomer parents (those born around 1946) who expected to provide financial assistance to their children to buy their first house – 18% to 20% – but the majority (57%) say they won’t help.
The propensity of parents being less willing to help their children financially and spend more on themselves has led to the term “SKIers” being coined, an acronym for “spending the kids’ inheritance”.
The survey found that 30% of baby boomers expect to retire with a mortgage.
This compares with 14% of Gen Y borrowers and 18% of Gen X borrowers who expect to retire with a mortgage.
Renee Amor, spokesperson for RaboDirect, says the softer housing market sounds a warning for boomers relying on the property market to fund their retirement.
“It has been traditional in this country to expect to retire with the family home paid off and increasing in value.
“It’s been seen as the ultimate safety net and often used to help younger family members get their start in the property market as well as funding retirement lifestyles,” she says.
“Our survey findings directly contradict this expectation and are of real concern in an environment where housing values are slipping and our population is ageing,” she says.
This sentiment is reflected in gap between parent’s concern about their children being able to buy their first home and the desire to help them.
Around 22% of baby boomers agree strongly that they are concerned about how their children will afford their first home, but only 13% agree strongly that they would like to help.
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The National Savings and Debt Barometer was conducted by researchers RFi on behalf of RaboDirect and was a national survey of 2,355 Australians aged 18-65.
