GENERATION Y - WILL THEY EVER MOVE OUT!
Some helpful advice for the increasing number of parents still providing the roof over the heads of their 25 plus year old children.
Recent studies confirm that vastly higher rates of 25-29 year olds are still living at home, compared with previous generations. Couple this with current housing affordability at an all time low, it seems the Australian dream of Gen Y owning their own home is becoming a myth.
Parents of Generation Y should not despair - there are a number of ways they can responsibly help their children prepare to purchase their first property.
Buying a first home is a major financial hurdle and in an ideal world kids would handle it themselves, as previous generations did.
But things are very different for today’s Gen Y and young families and they often need some assistance.
The first step is to seek the advice of a financial advisor who can establish a savings plan and budget to track expenses and identify areas they can cut back on expenditure.
Parents can also use the services of the financial advisor if they are considering assisting their children with a loan or donation towards the ever-important deposit and up front costs of buying a home.
Parents themselves can offer advice to their children and help them do the essential research in relation to mortgage options. Often, a mortgage broker who won’t charge for their advice is a good place to start considering what mortgage options are available to suit the individual’s financial situation. But one of the most important things parents can do is to keep things real for their children.
Too often these days, Gen Y want to move into their own home that has the same mod-cons and appliances of their parent’s home - something that took their parents 20 or 30 years of hard work to achieve and that’s just not realistic.
The purchase of a first home is an investment and should be viewed as such.
Getting onto the first rung of the property ladder represents an investment over the long term, so people should take their time and get it right.
If they need to compromise initially, on location, or furnishings or even the amount of work to be done on the property to get it like they want it, then so be it. Flexibility is the key to getting that first all important step right.
For parents who are letting their children stay at home to save for a deposit, they should consider charging a ‘nominal and affordable rent’ – which they can secret away into a savings account and present as a contribution towards moving out when the time comes.
This will assist children understand how important a budget can be and how the real world works, as well as help them get their deposit together, or use towards those upfront costs of purchasing a property such as conveyancing and legal fees, insurance, utility connections and council rates.
The trick is not to let the children know what you are really doing with the rent money so they don’t rely on it.
sanders property agents
