Will your children ever get to own their own home without your help?

Question

Ok so.. say an average home price in Sydney is in excess of $500,000 and the average home unit is $390,000. The average income in Australia is $50,000 and whilst we all want our children to be above average.. some are never going to make it... that's just how averages work...

So with $50,000 household income your child might manage to service a mortage of $200,000 and if they save really hard they might get themselves a deposit together of ~ $30,000.. (whihc will cover the stamp duty, bank fees and legal expenses... so where on earth will they get the other $300,000 if not from their parents?

So do we charge them rent until such time as they require a mortgage over our property to buy their own.. or do we let them have a good time and blow their money on overseas holidays and night clubbing?

I have three children and I can crystal ball that I will need about $1m in cash for them to buy their own home over the next 12 years... and I thought I was going to retire!

Oh.. it's not money that I have tucked away for a rainy day... and even if they do have a spouse and a joint income of $100,000 pa.. that will only service a loan of around $380,000... they still have to eat and pay taxes or vise versa.

Answer 1

like in all expensive cities, many people can't afford to buy property there. people with middle to low incomes simply can't find anything to buy and have to look elsewhere.

i can't afford a house in san diego and i'm guessing my kids won't be able to either- with or without my help. there are plenty of other cities to live in.

Answer 2

2

Answer 3

Or you could just do what my parents along with the majority of other parents do and instead of helping their kids out, make them take on their own responsibility and buy their own house. I am 23, and my husband of 4 years (he's 28) and I bought our house 2 years ago - we have a 30 year mortgage and we pay for our own home. Our parents have never helped us out with anything at all. As soon as I turned 16 years old and was able to work full time after school hours and on weekends, I bought my own clothes, vehicles, school supplies, car insurance, gas, school fees, everything. My husband had to do the same growing up. Your kid just needs to learn responsibility - plain and simple. They need to stop partying and face the real world of working and paying bills. After all, buying a home for your grown, kids whether they are married or single, is not your responsibility. Your financial responsibilty ends when they are of legal age and out of your house and on their own. You've just got to be tough on 'em. My husband and I have 2 kids and let me tell you, between paying for our house payment and utilities every month plus diapers and food, taxes and everything and everything else that kids need and that you need to pay for when you own a home, it's tight, but we make it work. It's just all about responsibility.

Edit: Just thought I'd add that together, my husband and I together only make $35,000 a year. It's all about managing your money and being responsible. It is doable, you just have to manage your money right. The sooner your kids learn this, the better off they'll be in life.

Answer 4

How much is the first home buyers grant? But I know many people who can't afford a house here. It sucks. I'm renting the house from hell...with this storm we're having right now there is water gushing out of the ceiling...it's valued at $500 000 for some unknown reason...

BUT...out at the Blue Mountains...you can get a penthouse...3 bedrooms, glassed in outdoors eating area/roof top, spa, ensuite, etc etc for around $300 000 when you keep an eye out for them. You can get small houses/cottages with spas, fully renovated with a garden for $200 000.

If you can work from home or get work out there, it's fantastic.

Answer 5

I say you let them do whatever they are going to do, and let them find their own way. If you want to help them out financially, why not invest the money in a mutual fund or two. Not tell them about it until they get married. It will be a nice wedding present for them to start a life.

People have to pay mortgages. that's the name of the game. They will pay the downpayment, and make monthly payments to a bank. Why do you have to be the one to cover the full cost of an extremely overpriced home?

Answer 6

If you want to "help" your kids out, the best thing that you can do is make sure they understand the way the world works and what they will need to do if they want to have nice things and live a comfortable life. It is your job as a parent to make sure your children can be mature INDEPENDENT adults, and you don't do that by giving them a buttload of money, you do that by teaching them how to earn it themselves, and how to be happy with what they can afford on their own, rather than expecting a handout from you (or anyone else for that matter).

Answer 7

They will qualify for the other $300,000 with their spouses income. You don't want to help them buy a house unless they have proved themselves serious and committed which means they would not blow their money on nightclubbing and overseas holidays. They will take things in moderation and get into a house when they are ready.

Answer 8

My husband and I gave both of our children homes when they reached the age of 21. Here property is much less expensive and we already had the homes as rental property. They weren't in the best of shape but they owned them free and clear. My parents did the same for us when we were starting out as did their parents for them. We used our first home to fix up and sell to buy the next better one etc... Hopefully our children will do the same. Every thing I have belongs in the long run to my children... So why shouldn't they have use of it when they need it? I have also helped them with cars and medical bills. We consider that to be a responsibility of being family. TH ey have also helped us during times of stress and emergency. IT is only right. Crone.

Answer 9

Well i let my children have a drink at home, they see that i dont drink very often and that i dont get drunk and nasty either, i try to teach them that alcohol is a way to relax on odd occations, i thought that this was the best thing to do so my children wouldnt go and get drunk at partys and in the streets like i did as a teenager.I had an alcoholic father so i was taught alcohol was the norm,but by 18 when i got pregnant on my first child i decided that i would only drink on social occations,and never when pregnant. I think the law would create a lot of uneducated drinkers and when they are old enough to drink will not realize the halm alcohol can do and cause.

Answer 10

I live in the UK and I still don't own my own house! With the inflation that is going on and the prices of houses getting more expensive year by year, I think I wouldn't have my own house in 10 years to come. About my children, LOL....I'm still thinking of myself, no children yet.