How the hell are my kids going to be able to buy a home?
Interest rate pressure may see the ‘Bank of Mum and Dad’ shut for good – and it has Tom Bowden legitimately worried about young people being priced out of the housing market.
Opinion
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I’m really not sure how my kids are going to be able to afford their own home.
Usually I’d follow up this kind of statement with a funny line, revealing my opening gambit to be nothing more than a piss-take, but in this case I’m being uncharacteristically serious. I’m legitimately worried.
And I want to make clear from the get-go, this is not a discussion piece about the steadily (or should I say rapidly) rising interest rates, because there’s an argument the rate rises we’re seeing now are just them getting back to what they were before the market went nuts around Covid.
This is about dollars and cents, and how I’m not sure my kids will ever have enough of them to buy their own home one day.
Getting nerdy for a moment – I know, you wouldn’t expect that from me – but according to PropTrack data, house prices across metro Adelaide have increased by 23.1 per cent over the past year. They’re up 34.7 per cent over the past three years and are up 42.2 per cent over the past five years.
ABS data shows wage growth has increased by between just 1.2 per cent and 3.9 per cent per annum over the past 10 years. Then there’s inflation, CPI increases, petrol price hikes, skyrocketing energy costs – and don’t even get me started on council rates.
I said this wasn’t a piece about interest rates, but just know they’re in the mix too …
So how the heck do kids these days buy a home?
Well, they get by with a little help from their friends. Specifically the first friends they ever had. More specifically, their parents.
You ever heard of the “Bank of Mum and Dad”? Yep, well, new stats reveal it is the ninth highest mortgage lender in Australia (worth collectively more about $35bn) with more than 60 per cent of first-time buyers hitting up their old folks for a helping hand in scraping together a deposit.
And we’re not talking loose change here. On average it’s about $90,000 a child. This sphincter-tightening figure is up more than 20 per cent in the past 12 months.
Full credit to those who are, but I just don’t think I’m really cut out to be a banker. It doesn’t interest me.
Truth be told, I kind of decided to carve out a career in journalism because numbers aren’t my strong point.
In my maths classes at high school, I found myself confused 30 per cent of the time, bamboozled 60 per cent of the time and genuinely perplexed the other 20 per cent.
Plus, I’ve got three kids. How the hell am I meant to help out all of them and still have enough in the kitty to enjoy retirement? Because current statistics show me that almost two of them will need a leg up.
Now, I don’t want to come across as some selfish prick who is looking to shaft his kids so I can live a life of luxury – I’m not like that at all.
I’m really excited about my kids owning their own home one day, and hope when the time comes I’m in a position to help them out if they need it.
As parents, that’s what we’re there for, and it’s what we do.
But I’m still allowed to be scared, aren’t I?
Oh, and for those of you who are already typing me emails about how my earlier percentages don’t total correctly, I should clarify that I always give 110 per cent. Absolutely always. That’s with everything.
Heck, I even exceeded the word count of this column, meaning to make it fit in the space I had allocated in the paper I had to cut it off really awkwardly before the end of the sen
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