There’s a pervasive myth that many millennials and recent homeowners are using the ‘bank of mum and dad’ to get their foot on the property ladder.
But research from the Great Southern Bank (formerly CUA) has revealed just five per cent of recent homeowners relied on family to secure their first property.
Great Southern Bank Chief Customer Officer Megan Keleher suggested new homeowners are using savvy saving tactics to buy property, rather than getting help from their parents.
“Fewer people are getting big handouts from the bank of mum and dad than public perception suggests,” she said.
“There is a general view that parents must be swooping in to help, but our research shows that for most people, just setting savings and budgeting goals is the way to owning a home.”
The Great Southern Bank Home Loaner Survey asked 1,000 Australians, aged between 25 and 44, who had recently bought, or were actively looking to buy a property, what type of home loaner they were based on their saving tactics.
One in 10 respondents believed family members or friends who had recently bought a property had relied on their parents or inheritance money for the bulk of their deposit. However, only 5 per cent had actually been this fortunate.
While most respondents are or plan to become joint homeowners with their partner, around a third had bought on their own or were looking to do so.
New South Wales (NSW) respondents said they had bought alone significantly more than other states (37 per cent) with Victorians least likely to buy solo (26 per cent).
The other key findings of the Great Southern Bank Home Loaner report were:
Budgeters – half of homeowners, 39 per cent of active home buyers
The most common approach was sticking to a strict budget or keeping a weekly/monthly spreadsheet of all spending and saving. Other tactics included switching to public transport, choosing cheaper options at the supermarket, or strategically not spending as much for certain periods of time to still afford big ticket events or activities.
Savvy hackers – 19 per cent of homeowners, 31 per cent of active home buyers
Taking advantage of government grants or seeking good deals and discounts in their daily lives was the savings strategy for this group. Buying second-hand items, hosting garage sales or getting creative with meals were other tactics, while some even started a side hustle to earn extra income.
In this group, 55 per cent had used the First Home Loan Deposit Scheme, with extra 19 per cent taking advantage of regional grants.
For those looking to buy, 88 per cent seek to benefit from government support and 29 per cent are applying for regional grants.
Long haulers – Nine per cent of homeowners, 16 per cent of active home buyers
This group like to take a slow and steady approach to saving for a property. Most of the homeowners among them said they took between two to three years, or more than five years to save.
Other home loaner types included:
- Hibernators – only five per cent of homeowners, nine per cent of buyers staying at home and not socialising in order to save for a deposit.
- Home Birds – only six per cent of all survey respondents had taken the extreme measure of moving back in with family or friends to speed up the saving process.
- Fortunate – five per cent of homeowners, two per cent of buyers had used the ‘bank of mum and dad’ or inheritance money to fund their deposit
- COVID-Sprinters – only one per cent had managed to save most of their deposit during the pandemic
“Taking a proactive approach to saving is clearly a winning strategy,” Ms Keleher said.
“Our research indicates this mindset sticks when people become mortgage holders too, and even those who didn’t go down the ‘budget’ or ‘savvy hack’ route, adopted this approach once they became a homeowner.
“The homeownership journey can be possible for all Australians and our research shows there’s no right or wrong path to take.
“Doing what works for your situation, applying some clever tactics, speaking to experts and trying not to be swayed by the myths that exist is a good start.”
|Homeowners %||Buyers %|
|Strict budget for each week or month||72||81|
|Keep spreadsheet of all spending and saving||55||48|
|Opt for more bargain options at the supermarket||36||39|
|Change mode of transport – public transport, cycling or walking instead of driving/car-pooling||14||16|
|Had some hibernation periods, to afford big ticket events and activities in their budget||30||n/a|
|Buy second-hand items instead||n/a||32|
|Take advantage of the first home buyers deposit scheme||55||59|
|Search for discounts online when shopping||54||89|
|Get creative with their meals||23||58|
|Buy regionally to take advantage of the regional grants||17||29|
|Bought cheaper property to save on stamp duty||34||n/a|
|Started a ‘side hustle’||19||n/a|
|Sell items at car boot sales, eBay, Facebook marketplace||46||n/a|