Most Australian young adults need parental help to buy property in Sydney, says RBA governor

By @vitthernandez on
Sydney Homes
A newly-constructed home is listed as sold on an advertising board in the Sydney suburb of Greenhills Beach, Australia, August 2, 2016. Reuters/Jason Reed

It is not just Chinese property investors who have difficulty coming up with the dollars to buy apartment units in Sydney. Even young adult Australians also find it hard to move up the property ladder from tenants to homeowners without their parents’ help.

“A lot of people of my generation are actually going to find themselves, if they haven't already, helping their children into the housing market because that may be almost the only way their children can enter the Sydney market anyway,” says Reserve Bank of Australia (RBA) Governor Glenn Stevens.

The situation calls for parents to reassess their level of wealth. Stevens explains, “That, of course, means that for people of my age, that the wealth we think we have in our house, actually, we don't have quite as much as we thought because we're going to have to give some of it to the next generation.”

He admits the current scenario could result in the disadvantaged becoming renters for life. However, Stevens admits he does not have all the answers to the complex housing problem of many young adult Australians.

The RBA governor, who ends 10 years of leading the Australian central bank for 10 years, says if the parents are renters themselves, they would not have the equity to help their children move higher into the property ladder.

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Source: Step Ahead Properties

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