Researchers find how young Aussies can jump onto the property ladder

While owning a home is getting harder in most parts of Australia, researchers have set out to find how young Aussies can climb onto the property ladder.

A new study finds how young Australians can buy their first home. Picture: NewsWire / Max Mason-Hubers

With house prices feeling out of reach for many people, researchers set out to find how young Australians could enter the property market.

While the study found the bank of mum and dad was the most effective way for young people to buy their first home, researchers also discovered the best ways for homebuyers who didn’t have the option to get their foot in the door.

Curtin University Distinguished Professor Rachel ViforJ recently published a study Barriers to Homeownership Among Young People in Australia: Unpacking Competing Hypotheses.

She said since the house price income ratio started to spiral in the late 1990s and it had not gone back down to a level where things were affordable.

Curtin University Distinguished Professor Rachel ViforJ recently published a study to find how young people can buy their first home in Australia. Picture: NewsWire / David Swift

“Back in the 1990s, the house price/income ratio was about four, now it’s about eight nationally, and even higher in capital cities like Sydney,” she said.

“I don’t think there’s been a time in history where it’s been more difficult.”

The study found people who received at least $5000 from their parents were four times as likely to become a homeowner.

The study also found young people who lived rent free in a second home owned by their parents were two and half times more likely to get into home ownership compared to people who paid rent to a landlord.

“If you don’t have access to the bank of mum and dad, whether it’s through cash or through just being able to live rent free in a property they own, then you are certainly not starting off on an equal footing as those who do have parental help, and that’s really unfortunate.

“But saving regularly does help.”

A study found people who put aside money each money had 30 per cent more chance of owning a home. Picture: NewsWire / Max Mason-Hubers

Ms ViforJ said while it did not help as much as getting money from your parents, putting cash aside each month increased your chances of owning a home by 30 per cent.

The study also found people who planned more than a year in advance increased their chances of owning a home by 40 per cent.

“There is an advantage to being really disciplined financially by putting money aside every month and also planning for the following year, planning what’s going to happen in 12 months time.”

Ms ViforJ said for many people home ownership was not possible without some form of government assistance.

She said there were more schemes available to first homebuyers but some schemes were capped restricting the number of people who could access them.

“Not every young person can get in and take advantage of some of the schemes that are available,” she said.