A real estate agent's golden buying advice for young families

The short answer is, we’re screwed.

When I was in year six, back in 2003, I was given an assignment on if I was given $1 million, how would I spend it.

I remember my imagination running wild, dreaming about houses (yes, plural), cars and holidays, a weekend farm, and so many toys.

Today, if I set my real estate app to a maximum of $1 million in Sydney, my multiple houses have been reduced to a two-bedroom apartment. If I’m lucky, it comes with a garage.

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The depressing trajectory of house prices coupled with rising interest rates and the dream of owning a three-bedroom house with a yard and a pool seems totally unachievable for me and most of my generation.

In 2022-23, nearly one-third of first-home buyers used federal government schemes provided by Housing Australia to purchase a property, a significant increase from the previous year. These schemes include the First Home Guarantee, Family Home Guarantee, and the Regional First Home Buyer Guarantee, offering eligible buyers the ability to secure mortgages with minimal deposits.

According to Digital Finance Analytics, the proportion of first-home buyers seeking parental assistance has risen from 3% in 2010 to 28.8% in 2023.

That's a lot of people hitting up the bank of Mum and Dad, but what if you don’t have that option?

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Will the housing market ever settle? Picture: Jeremy Piper

The short answer is…

I spoke with real estate agent Ryan Woo from Stone Real Estate, and the short answer is we’re screwed.

“Family support seems to be the only way many young families can enter the market,” he told Kidspot. 

He chalked it up to three main reasons, saying the first hindrance is actually being in a financial position to purchase... and the current climate certainly isn't helping. 

“High-interest rates, mortgage repayment pressure, having one income if one parent is full-time carer; just being able to qualify for a loan is the first hurdle,” he said. 

The second reason comes down to competition, “Wealthy investors are commonly buying up ‘first home buyer/young family’ style homes prime for knocking down, rebuilding and reselling.”

And finally, it’s all about location, location, location!

Ryan said, “Inner city suburbs are so unaffordable. We are seeing first-home buyers/young families priced out of major cities and forced to relocate families to regional areas.

“This move is just so they can have a house for their kids to enjoy a backyard. It’s very sad.”

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"Just being able to qualify for a loan is the first hurdle," says real estate agent Ryan Woo. Source: Supplied

Think outside the box

Ryan wasn’t all doom and gloom and had some pretty interesting suggestions to help ease the burden.

On top of the usual start saving early, he also recommends thinking outside the box when it comes to traditional ways of living. 

“Be open to alternatives like pooling finances together with family to buy a house where you can split into two separate dwellings. E.g. One family upstairs, one downstairs.” 

A helping hand from Mum and Dad

For those who have access to the bank of Mum and Dad, Ryan informed Kidspot they may be the best generation to help.

“It seems the generation above millennials are in the best position to help as they are fortunate to have experienced the most growth in property values. 

“So using the equity to support our generation is an option through guarantee loans.

Originally published as A real estate agent's golden buying advice for young families