Parents may be able to use the equity in their existing home to help their children get on the property ladder, under options being considered by the NSW Government to boost housing affordability.
The Sydney Morning Herald has reported that, under the scheme, parents would hand over equity in their home to the NSW Government, to enable a contribution from the government to the child.
The child would then be able to use this contribution to put down a deposit on their first home.
As a parent, I would happily sacrifice some equity in my home if I knew it would give my kids a foot in the door," the paper quoted Premier Dominic Perrottet as saying.
The scheme is among a number under consideration by the government to assist first home buyers. Another may involve the government and the first home buyer sharing equity in a future property.
Thanks to Australia's property prices, parents have played an increasing role helping their children on the property ladder.
Researcher Digital Finance Analytics (DFA) has concluded that parents have became Australia’s ninth biggest mortgage lender, with 60 per cent of first time buyers getting financial help from their parents.
DFA found that parental contributions average $92,000 in April 2021 - enough for a 20 per cent deposit in most parts of Australia.
The term 'Bank of Mum and Dad' has now become a household phrase across Australia.