Sell with Confidence
Read More
News

For The Kids and Then For Mum and Dad

By Craig Pontey

For The Kids and Then For Mum and Dad

February 20, 2014 by Craig Pontey

These are two topics I have briefly talked about in earlier posts. In short we have two important demographic trends that are very much a part of the local residential market in the east. I would like to expand on my previous brief remarks, and so what exactly is meant by ‘For The Kids and For Mum & Dad.’

What I have seen first-hand now for many years is a trend where parents are buying property, for their children, both as investments but also as a first home, somewhere to live and start to establish their own lives. It’s a trend mainly seen in new apartment projects, but there is the same demand for well-located established properties.

I think that new off-the-plan projects have particular appeal for several reasons starting with the fact that most projects take a few years to deliver and while they are being built the family has time to think about the purchase and do a little planning. I also note that it is a trend for the family, whenever possible, to buy in their own local area because I think buying locally is reassuring, and possibly mum and dad might just want to keep on eye on the kids!

New projects also offer an immediate prospect of capital gains, and if the property is to be an investment, these projects are also very popular with tenants. If the purchase is to be a first home, then again there is time to plan and mum and dad might also be planning a move themselves, but we will come back to that shortly.

A Good Idea Still Needs Careful Consideration.

While this trend has received some recent publicity, it is not a new trend, it’s been around for years and the reasons parents step in to help can vary, but in many cases are similar. While not always the case, some parents naturally worry that their children, who might now be very young or in their teens may find it hard to afford their own home in 5 – 10 years time. And a step-up today can also be a sort of early inheritance and the property is secured at current values.

It could also be a tempting way for some parents taking charge so that their adult children do not end-up living at home ‘for ever’. Sure there are other ways for mum and dad to help, like acting as guarantors on mortgages, or paying the deposit or renting an investment property to kids at much less then market rates.

However while I except that properties can be expensive for young person or couple, I also think that the trend we are seeing now has great appeal to the whole family and they all take on the process and enjoy the journey. But then I think there is a great deal of personal contentment for the parents, and a helping hand now will pay great dividends in the future.

Helping your child on their way to owning their own home, however, can be an emotional decision and I think that most people understand that but they keep a very level head. When I have clients in this position the purchase is still done on a logical basis from every perspective. That includes from an investment perspective and as a desirable lifestyle option.

If you might be deciding whether helping the children buy a home is a good personal investment then this will really come down to your individual and family circumstances, however it is a trend that I think is very positive and is here to stay. In my next post I will look at another big and related trend, and that is a move by mum and dad to re-locate themselves into a new home, trade down in size, which usually means buying a new apartment, but there is also the reality that in an established area like the east new supply is limited and planning rules may well be frustrating both of the trends.

Up to Date

Latest News

  • Top agency team sells six properties in 10 days amid pandemic

    DESPITE the COVID-19 pandemic, an Associate Director and Sales Executive from the most successful Australian real estate business within the Ray White network has sold six properties totalling more than $15,500,000, in just 10 days. The highlight of the six deals was the $3,500,000-$3,700,000 sale of 1 Shaw Street (pictured above) in … Read more

    Read Full Post

  • Ray White Double Bay returns to auctions with a bang

    IT WAS a chilly night in Sydney but that didn’t stop nine eager bidders from turning out for the hotly contested Ray White Double Bay auction at 113 Victoria Road, Bellevue Hill. Sold by Double Bay Managing Director Elliott Placks and agent Alan Fettes, the four bedroom home went under the … Read more

    Read Full Post