I saw over the weekend that one 20 something girl has purchased a million dollar house in Surry Hills, Sydney. Wow that is a lot of money for your first house. Her parents helped her do this as it was out of her reach. I feel the same way and I am a lot older than this girl.
I did not have parents to help me. My fiancé’ at the time now hubby and I bought cheaply as we could not afford the million dollar first house (We used to live in Ultimo and now live in the Blue Mountains). That said, if you can afford to help your kids why not? I am sure my mum would have loved to have helped me and my sister but cannot, so that is no big deal. We will do things ourselves.
According to a Sydney Morning Herald article: “Social media was full of tales of parents spending $1 million-plus to secure their children inner-city houses. A two-bedroom terrace in Rainford Street, Surry Hills, sold to a 23-year-old university student for $1,094,000 – $119,000 above the reserve.”
The city or close to it of course commands a higher price due to less travel time and the convenience of being so close to amenities, services and all that the city offers. The further you go out of the city the cheaper your costs get and of course your travel time increases. In the same article there are prices for other houses that are out of reach to the average person, well me for example.
Costs have blown out of control and many people cannot afford to get a house or even save for the deposit. If they have no rich relo’s or family friends giving them a loan they have to do it the hard way and save for years themselves.
I do believe that my girls will stay at home longer due to the costs of houses, but I think that if they rely on mum and dad to help them get a house, they might have a shock coming. I am not sure we will be in a position to do that, but if we can we will help. I also don’t want to risk all to have a kid not pay the loan back and we lose it all. At this time in our lives we will not be able to get funds for a new house.
Maybe if they stay at home and save some money they can get into property earlier? Maybe if they buy an investment at 18 and then use it as leverage for later? Buy a block of land if there are any left in the future and sit on it? Not sure what the answer is, but the only thing that you can do is to squirrel away money for the future.
If your kids are still young, why not have a savings account to start them off? You don’t need to put heaps in a little each week would help. Compound interest will be your friend and if you can stash it away for 10 or more years who knows what you can save. This could be for a trip, education fund or the deposit for the new house. At least the money will allow you to have a choice.
Have you helped your kids get the first house? Will you be a position to help? I don’t think there is anything wrong with your kids doing it themselves, it creates character and makes them want it more. As said, if you are able to help, great! If not no biggy just the situation and there are other ways.
I just wish that I had a helping hand at 20 something and maybe I would be in a different place now? Well that is just wishing and wondering about the what ifs. I am sure everyone does it. However I like everyone else need to concentrate on the now and moving forward with what we can do and save for.
What do you think? Send in your comments.