parents

A surveys lays bare the changing values caused by the expensive property market

A SURVEY has revealed that most children these days expect to be helped by their parents in buying into the increasingly expensive property market.

And according to the survey, a majority of parents would be prepared to make sacrifices to make their offspring's dream a reality.

The ING Direct survey of 314 families across Australia says that eight out of 10 parents would sacrifice lifestyle and financial benefits, with almost a third willing to put off retirement to contribute to their children's first home, while 10 per cent say they would give up their retirement savings.

More than 20 per cent of parents say they would spend less on a holiday or go without one altogether, with around the same proportion saying they would be prepared to not update their car.

And 10 per cent would also redraw or remortgage their own home to see their own children move ahead.

"The world has changed a little bit where people would work two or three jobs and they saved for their deposit," ING executive director of retail mortgages Brett Morgan said.

The survey centres on what the parents of 19 to 29-year-olds would be prepared to do, as opposed to what they were doing to assist, with 87 per cent saying they feel obliged to help out.

"Around 46 per cent of parents would give up their empty-nest lifestyle and allow their kids to stay on longer so they could save for a deposit," Morgan says.

A third of parents also say they would be prepared to remain in the workforce longer to support their children, with 26 per cent spending less on themselves and redirecting the money to their kids to help them either save a deposit or help them make repayments. And 6 per cent say they would make a significant contribution to the overall cost of the property. But even more startling was the children's response to the survey, with almost three-quarters of the 410 surveyed saying they believe their parents are obliged to help out.

"And 44 per cent said they expected cheap or free board," Morgan says.

More than 20 per cent of the children also believe cash should be contributed to the deposit, while 36 per cent also believe their parents should go guarantor on their home loan.

"That's the only area that stood out where the kids expected more than the parents were willing to sacrifice, with only 23 per cent of parents offering to go guarantor," Morgan says.

"I think most parents know more about guarantees than the kids. It's one thing to give you free board and put some money towards a deposit, but to give a guarantee is something that lasts the length of the loan."

But Warren O'Rourke from Mortgage Choice says a trend is growing in Australia for parents to go guarantor under a less demanding scheme.

"Under the old scheme, a parent had to put up their entire house and that obligation was always a concern that a parent could lose their house," says O'Rourke.

"That is still there, but the difference now is there may only be a 20 per cent deposit required to get people across the line. So the guarantee kicks in for that 20 per cent and once the loan is reduced below 80 per cent, that guarantee can expire."

ING Direct says that with housing affordability and a property shortage remaining a key dilemma in Australia, parental assistance is likely to stay, with some forms of assistance also beneficial for parents.

"Instead of saying 'here's some money, off you go', you could also buy into the property with your children so it's tax deductible -- and that way they own half of it and receive rental income," Morgan says.

O'Rourke says more parents are tending to buy in with their children.

"And a lot of people have equity in their own home, so another option is to refinance and increase the mortgage on their property and then hand over that money to the child if they wanted to give them some kind of gift," he says.