Brutal truth about how Gen Z and Millennials are buying homes
Younger Australians are increasingly climbing the property ladder on the blood, sweat and tears of others because they can't do it themselves.
Exclusive mortgage research has uncovered the sources of home buyers' deposits and the other upfront costs of home purchasing, exposing a brutal truth: a lot of the time it's not their money.
Close to a quarter of Gen Z and Millennial home buyers polled in the survey said they funded their home deposits with borrowed money.
And a similar proportion said they got help in the form of a cash gift from their parents, while government handouts were becoming another popular method for buying, especially among Gen Z.
The Mortgage Choice survey also revealed home buyers below the age of 43 – making them either a millennial or part of Gen Z – were increasingly relying on sources outside of savings to crack the market.
Units often offer a more affordable entry point into the market but Gen Z buyers often still struggle to come up with the deposits needed.
It comes as separate analysis showed the deposit hurdle has become the biggest barrier to homeownership for many aspiring home buyers due to cost of living pressures and runaway home price growth.
Simply put: many younger home seekers have been watching home prices grow at a faster rate than they can save and have struggled to come up with a deposit large enough to support their purchase plans.
Mortgage Choice CEO Anthony Waldron said cash gifts from family were becoming a particularly common way for younger Australian to buy a home.
'As property prices have reached new record highs, getting into the market has become harder, so we asked survey respondents how they were doing it,' Mr Waldron explained.
'We found that more than a fifth of Gen Z respondents were funding their home loan deposit with a cash gift from family making the bank of mum and dad one of the largest lenders in the country.'
Bidders will often bring their parents to auction to help them. Picture: Josie Hayden
'Our survey supports what we hear from Mortgage Choice brokers, particularly those in Sydney where median home prices have climbed to over $1.1 million.
'Our brokers tell us that many first home buyers can't afford to buy in Sydney without a cash gift, and those gifts range in value from $10,000 to as much as $500,000.'
The Mortgage Choice research followed a recent Finder.com.au poll, which showed a significant proportion of Aussies were not supporting their lifestyles with their own earnings but with debt.
Finder noted that many Aussies were overextending themselves to keep up appearances and the higher cost of their holidays, cars and clothes were limiting their ability to save or plunging them into debt.
Credit reporting agency Equifax had a similar finding, showing more than half of Aussies 18-24 were using Buy Now Pay Later services, which was dragging on their credit scores.
MORE FIRST HOME BUYERS LOOKING
Mortgage Choice home loan submission data revealed an uplift in first-home buyer activity over the March quarter, with the number of loans rising 5.6 per cent.
The value of loans rose 12.3 per cent year-on-year.
Home prices have risen nationally over the past year.
Mortgage chalked the rise down the recent drop in home loan interest rates – and the prospect of more cuts – driving renewed optimism in the housing market.
About a third of survey respondents said interest rates had made them more confident to buy – up from 23 per cent in the previous quarter and up 20 per cent year-on-year.
By comparison, a year ago, 63 per cent of survey respondents said interest rates were adversely impacting their confidence.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
ABC News
13 minutes ago
- ABC News
Leaked emails reveal National Trust SA's dispute with volunteers over 'service fee'
A group of South Australian National Trust branches is protesting a new "service fee" on their earnings, imposed by the heritage group's head office. Then-chief executive Simon Ambrose contacted the state's 45 volunteer-run branches in April, advising the organisation would invoice them for 10 per cent of their gross annual revenue. According to Mr Ambrose's email, the annual fee would "address the increasing demands of our operating environment", including auditing and tax compliance. However, an email obtained by the ABC between Kingston SE branch chair Alison Stilwell and her counterparts from other branches indicated a pushback from the volunteer base. On July 7, Ms Stilwell wrote that a meeting with the NTSA Council — its board of directors — "did not offer any change to the service fee arrangement". "I am disappointed and have expressed that to the president, vice-president and interim CEO," Ms Stilwell wrote. "I've spoken at length with [President] Millie Nicholls, and she is going to ring or visit branches to explain and discuss." Ms Stilwell, also a council member, is understood to be mediating between management and volunteers. She said she received feedback about the plan from 31 branches. It is not suggested all feedback was negative, but Ms Stilwell said it indicated there was "a lot of work to be done" and she was "continuing to push for a better outcome". "My feeling is that despite things not being as we'd have hoped now, there will be changes not far away," she concluded. Ms Stilwell referred questions to the NTSA head office. The National Trust maintains more than 100 heritage-listed properties across the state, including landmarks such as Ayers House, Stangate House and Z Ward Glenside. It is currently attempting to secure UNESCO World Heritage status for the Cornish mining sites in Moonta and Burra, and has campaigned to keep Mintaro's Martindale Hall in public ownership. In a statement, NTSA president Millie Nicholls said the service fee was "part of an internal effort to ensure the ongoing success of the trust by supporting essential functions such as consolidated auditing, insurance, and financial compliance". "While the fee has been issued, we are continuing open discussions with branches to address concerns and clarify the benefits of centralised support," Ms Nicholls said. "Feedback is being incorporated and further engagement is planned over the next few months." The ABC also became aware that the trust this year sold an empty parcel of land in Moonta and was in discussions about the future of the 19th-century National Australia Bank building in Burra. In response, Ms Nicholls said the charity was aiming to "strengthen its financial sustainability" by "reviewing under-utilised assets", as well as seeking income through events, accommodation and donations. The ABC spoke with volunteers from 10 National Trust branches, none of whom wished to be identified. Branches said their biggest costs were insurance, utilities bills and general maintenance, and the service fee invoices ranged between several hundred dollars and five digits. None reported any preliminary consultation, but Ms Nicholls said branch meet-ups and communications occurred several months prior. One volunteer said they believed the need for a new charge was not properly communicated. "We were willing to acknowledge that they might have to operate differently, but they haven't explained how they calculated this figure," they said. "That means that we can't explain it to our members … so that level of accountability is missing." Ms Nicholls said the overall amount was "tied to the workload for managing each branch's operations". Several volunteers said they were holding off on paying in anticipation of a compromise.
ABC News
13 minutes ago
- ABC News
Federal politics live: Federal government won't rule out assistance to Mount Isa copper smelter
Industry, Innovation and Science Minister Tim Ayres says the federal government will not rule out assistance to the Mount Isa copper smelter in Queensland. Follow our live coverage below.
News.com.au
13 minutes ago
- News.com.au
Jonesy and Amanda reveal their radio future
Longtime radio duo Brendan 'Jonesy' Jones and Amanda Keller have made a major announcement about their radio future. The pair, who host the Gold FM breakfast show in Sydney, have confirmed that from next year they will host a show in the afternoon instead. 'Brendan and I are going to go to the drive shift,' Keller said at the beginning of Friday's show. The hosts said they were hoping to keep the news quiet for a bit longer, but felt compelled to make the announcement on today's show because rumours of the move had been published in the press this week. 'Radio's about being authentic and real and that's what we are,' Jonesy said. Keller added, 'to be authentic and real, we could have stayed doing the breakfast hours for longer, but as long as you guys come with us and listen to us in drive … we're excited! 'To be  given a chance after a 20-year-old show to try something new, I'm looking forward to that,' Keller said. Breakfast replacement It's all but confirmed that The Christian O'Connell Show, which airs on Gold FM in Melbourne, will be networked into Sydney breakfast as well from 2026 onwards. O'Connell was a huge radio star in the UK before he emigrated to Melbourne in 2018 to host the Gold 104.3 breakfast show. It didn't take long for listeners to warm to the Brit, and within 18 months his show was number one. His show, which features Patrina Jones and ex-Channel 9 presenter Alex Cullen, is currently rated the number two FM breakfast show in Melbourne behind Nova's Jase and Lauren. Former radio executive and host of the Game Changers podcast, Craig Bruce, told Media Week that O'Connell should be able to win over Sydney listeners. 'If anyone can come into a market and really embrace it, we've seen what Christian has been able to do in Melbourne, and I'm sure that will happen in Sydney,' he said.
