Baby Boomers are under a lot of financial pressure. Not only have their superannuation investments been loosing money due to dramatic drops in the stock market, their children are counting on financial assistance to purchase of their own properties.
One in three Gen Yers claim they can’t afford to buy a home without financial assistance from their family.
And one in five parents nearing retirement know that their kids are counting on them to assist in the purchase of their first home.
The results, from a survey of 2300 adults in May commissioned by RaboDirect, have escalated concerns that the future will bring many family disputes over money. There is a danger that some parents may decide to offer their family home to guarantee the children’s purchase – this will place the family home at risk in the event that a child defaults on their home loan.
RaboDirect general manager Greg McAweeney warned all generations should think twice before taking on extra loans to assist family members, no matter how noble the intention.
”Baby Boomers have enough to be worried about without added concerns about dipping into their super to help their kids buy their first home,” Mr McAweeney said.
Borrowers who are not able to qualify for a home loan in their own right perhaps should consider whether bringing their parents in to share the debt is a good idea.
These findings come as no surprise in stagnant property market with potential borrowers concerned about interest rates and the general state of the economy.
The survey indicates that 50% of all people aged under 40 intending to take out a home loan in the next few years are single, living in a shared house or living with parents.