Bank of Mum and Dad – Digital Finance Analytics (DFA) Blog

Property Markets Caught In Higher Rate Trap As Parents Help More To Buy!

We are at a significant point in the spring auction market as the prospect of early interest rate relief for home buyers becomes more uncertain in the months ahead, even though weekly clearance rates are so far holding steady, as overall property listings rise.

But within that less expensive property is shifting faster, driven by a further rise in those buying with the help of the family bank – with money from parents, grandparents or siblings, easing the purchase path, whilst other first time buyers are clubbing together to become joint owners of a new home, despite the potential risks.

More generally it’s another symptom of the broken housing market. If you want to learn more about this, and get the latest on our modelling, join us next Tuesday for my live stream at 8pm Sydney, where you can ask a question live. You can see the latest post code level analysis and we will also look at the broader trends.

This is a time for caution, given the rising levels of uncertainty, but that said, for many jumping from the rental sector to buying their own home could be equivalent to jumping from the frying pan into the fire in the current environment.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Digital Finance Analytics (DFA) Blog

Property Markets Caught In Higher Rate Trap As Parents Help More To Buy!

00:00 / 00:14:34

Property Markets Caught In Higher Rate Trap As Parents Help More To Buy!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

The Bank Of Mum And Dad Is The Fifth Biggest Lender In New Zealand!

Research from Consumer NZ highlights the role of the Bank of Mum and Dad in New Zealand, in parallels similar to those already seen in our research in Australia.

Many kids can only get into property thanks to inter-generational wealth shifting, and in some cases this is also putting parents under financial pressure. This is a sign on long term property failure.

The Bank Of Mum And Dad Is Getting Strangled! [Podcast]

We examine the role of the Bank of Mum and Dad, in the light of the latest data. As well as highlighting inter-generational issues, there are pressures on both parents and their kids. And if you do not have “wealthy” parents the chances of getting into the property market is diminished significantly.

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

The Bank Of Mum And Dad Is Getting Strangled! [Podcast]

00:00 / 00:16:16

Flip To Rally Mode – For Now: The DFA Daily 8th Dec 2021

In today’s show we look at the latest from the markets, consider the proposals for digital currency reform in Australia, and look at a weak report on the Bank of Mum and Dad from the Productivity Commission.

First as expected, we flipped back to buy mode on the markets, as the impact of Omicron is re-calibrated, and ahead of the US inflation number at the end of the week. We keep flipping from buying value stocks to growth and back.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

The Bank Of Mum And Dad Goes Through The Roof!

We look at the latest DFA survey data relating to how parents are helping their kids to enter the Australian property market. The totals are growing fast, despite the risks. But there are a number of questions to be asked, and trade-offs to be considered.

Not least the relationship between BOMD and Lenders Mortgage Insurance. https://digitalfinanceanalytics.com/blog/what-you-should-know-about-lmi/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

The Bank Of Mum and Dad Goes Boom!

Latest data released today from the DFA household surveys shows that a smaller number of potential first time buyers are now getting help from their parents to buy property.

This video explains what is going on.

At its height 60% of first time buyers were getting help from their parents, but this has now dropped to 20%. In addition the value of that help has fallen from around $88,000 to around $75,000, on average.

That said the total amount lent by the Bank of Mum and Dad is approaching $30 billion.

This puts the Bank of Mum and Dad among the top-10 lenders in Australia, based on the latest APRA data, in terms of loan stock.

Three drivers explain these changes. First parents are more concerned in a falling market about the equity in their property, when facing into retirement. The “ATM” has run dry. They cannot afford to pass money down the generation now.

Second despite some incentives, such as those in the Northern Territories, announced recently, many first time buyers are preferring to wait, rather than buy into a falling market and risk loosing their deposits. Plus we know that those who get help from parents are twice a likely to default in the subsequent 5 years compared with those who saved.

Third, banks are reluctant to lend, and a seagull payment is not regarded well, compared with a record of regular savings. Some lenders have stopped lending to borrowers with a Bank of Mum and Dad deposit.

Thus we think the momentum we saw last year is slowing and the Bank of Mum and Dad may be a less important factor ahead.

Some parents may decided to help pay monthly mortgage payments instead as this is a more flexible alternative and does not risk capital.