How Are Most FHBs Getting On The Property Ladder? Interesting Statistics

[donna]

Hi All,

Here is an interesting report from The Public Trust on how wealth gap is growing due to family financial assistance to first-home buyers.

New research shows a staggering 95 percent of Millennial homeowners received financial help to own their own home, closely followed by Gen Z homeowners with 79 percent receiving help.

Young people receiving financial assistance, in some cases called ‘early inheritance’, changes the face of what legacies look like further down the track.

It also contributes to increasing the wealth gap, with young people who are not able to receive financial support from their family less likely to be able to get onto the property ladder.
And with home ownership rates declining, intergenerational wealth is expected to decline as a result as individuals and families will have fewer large assets to pass on.

When combined with other complexities - like the high cost of housing, the increase in blended families and separations, or if early inheritance is given unevenly between children – this paints a bleak picture for younger New Zealanders.

• 52 percent of Gen Z listed access to affordable housing as one of their three biggest concerns for the future, along with 30 percent of Millennials.
• 39 percent of our survey respondents say their biggest concern is not having enough for their own comfortable retirement.
• Even younger generations are already seeing the financial benefits of inheritances, with 41 percent of Gen Z and 46 percent of Millennials reporting having received a financial legacy already.
• When it comes to protecting their legacies, only 16 percent of Gen Z and 31 percent of Millennials have a will, compared to 81 percent of Baby Boomers.

“These insights show the impact the cost of housing is having on families and their legacies – for so many younger people, the only way into home ownership is with financial support from others,” says Glenys Talivai, CEO, Public Trust.

“This can put significant pressure on many Kiwi families who, if they are able to, want to financially assist their children into homes but many are also mindful of the large amounts of money they may need saved for their own retirement.”

“People are living longer, and this means retirement savings need to last significantly longer than previously.

“With almost half of New Zealanders reporting a level of financial discomfort, our ability to plan for the future is diminishing. Additionally, as we live longer, we leave less financial security as a legacy,” adds Glenys.

“The research insights continue to reinforce the importance of having conversations about death, money and the future with those you love, even if they are difficult. Talking about money and what happens when you die is not an easy discussion, but having a will in place, as well as a Statement of Wishes outlining why or how you came to the decisions, can be beneficial and save your family a lot of stress when you die,” says Glenys.

-END-

From The Public Trust

Who on PropertyTalk has helped out a family member get onto the property ladder?

Was it an early inheritance?
Interest- free Loan?
Or gift?

41 percent of Gen Z and 46 percent of Millennials report having received a financial legacy

^^ Hopefully it was to purchase a home.

Cheers,

Donna

[frances56]

Hi. Our two young adult children are looking at buying together. We are going to gift up to about $50,000 towards their deposit. We were going to loan it but too complicated.

[jamesdonaldson]

Hi. Our two young adult children are looking at buying together. We are going to gift up to about $50,000 towards their deposit. We were going to loan it but too complicated.

Your kids are lucky to have you, that'll make a huge difference in their ability to get a home loan these days. I was lucky to receive some help from my parents, but this was a long time ago, so it went a lot further. Buying a house is much more complicated than it was when I first bought. I've been helping my niece navigate the journey. She didn't have much of a deposit but was able to get a low-deposit home loan (don't worry, it was an affordable area!) to get herself on the ladder. Once she added her Kiwisaver and first home loan grant she had quite a decent deposit to put down. If anyone is looking to buy their first home, make sure you're aware of the financial assistance available!

[donna]

^^ I changed the link to a more informational one - as I am sure that was the intention of the poster - i.e. provide a link that explained the ins and outs of a first home loan grant.

Which basically is:

• You're buying an existing house
• Be contributing to Kiwisaver for 3 or more years
• The grant can be a max. of $5000 if you've been in Kiwisaver for 5 or more years

regards,

Donna

[JBM]

Hi All,

Here is an interesting report from The Public Trust on how wealth gap is growing due to family financial assistance to first-home buyers.




From The Public Trust

Who on PropertyTalk has helped out a family member get onto the property ladder?

Was it an early inheritance?
Interest- free Loan?
Or gift?




^^ Hopefully it was to purchase a home.

Cheers,

Donna

Yes the divide will only increase as its going be even harder for those without high net worth families+ inheritance ... to become HNW .. our couple kids will both be inheriting many millions .. as majority of the wealthy families don't generally have large families and they also having kids later in life ... my parents were in their early 20's. (myself youngest of three) ... these day 30's is very common to start a family(we did mid 30's) ... so our kids will benefit not only from our inheritance but also the one we will get in time ...

Compare that to the masses of average kiwi young getting jobs these days just trying to just afford shelter / food / transport costs each week!! ..just having a home debt-free could well be a HUGE achievement for majority without inheritance