Young Australians are increasingly relying on their parents to help them get a foothold on the property ladder. 

As housing supplies tighten and prices rise, more Australians are turning to their parents and other family members for a hand. 

What’s colloquially known as the “bank of mum and dad” has become a significant player in helping young people gather a deposit for their first home loan. 

This trend, driven by soaring house prices and stagnant wage growth, signifies a deeper issue related to housing affordability and financial independence among older members of Generation Z and younger millennials. 

The “great Australian dream” of home ownership is becoming increasingly elusive for young people.  

Skyrocketing house prices in major cities, coupled with relatively static wage growth, have meant that saving for a substantial deposit – the first step towards homeownership – has become a Herculean task for many. 

In response to these challenges, many young adults are relying on financial assistance from their parents. 

This assistance comes in various forms, including direct monetary gifts and loans, and parents acting as guarantors for their children’s mortgages. 

The bank of mum and dad has effectively become one of the nation’s largest and most influential financial institutions by default. 

While parental support has opened doors for many, it also raises concerns about perpetuating inequality and dependence. 

Those fortunate enough to have parents with the means to assist them gain a significant advantage over their peers who do not have the same level of support. 

Unchecked, this dynamic could widen the wealth gap among young Australians, entrenching social and economic disparities. 

In recognition of the growing housing crisis, the Australian Government has introduced measures such as the First Home Guarantee to alleviate some of the pressures facing first-time homebuyers. 

The scheme aims to support eligible Australians in purchasing their first home sooner by offering guarantees that allow them to buy with a smaller deposit – as low as 5%.  

This initiative, while beneficial, is only a piece of the puzzle in addressing the broader issue of housing affordability. 

For many young people, getting on the property ladder is a challenge. The reward is not just a roof over their heads, but a valuable asset in the future. 

While real estate prices have fluctuated, they have trended upwards over time because generations of Australians have held on to the dream of home ownership. 

The dream remains the same, but now it’s being assisted by the bank of mum and dad.