Trump has attempted to remove Lisa Cook from the rate-setting board over allegations made by the head of FHFA. Cook has denied wrongdoing and said she would continue serving on the board.
Fill us in on a negative professional experience you’ve had where you weren’t really sure who was the problem, and we’ll render a verdict.
The S&P Cotality Case-Shiller Index reported home price gains of 1.9 percent while the FHFA reported nationwide home price gains of 2.9 percent. Inflation sits at 2.7 percent, which still leaves consumers in a sticky situation.
A former Brinkworth bank has prompted just as much curiosity from the families of past tellers as it has from serious buyers.
The historic building and attached residence at 35 Main Street opened in 1903 as the Bank of Adelaide.
It became a branch of the ANZ Bank in 1979 but closed four years later and was subsequently sold as a four-bedroom character home.
It is back on the market and being sold as a home but selling agent Chelise Zapisocki, of Harcourts Barossa Real Estate, said it could also be a business.
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The Brinkworth property at 35 Main St used to be a bank.
The original bank vault still remains in the property – former tellers’ names can be seen scrawled on the door.
Inside the bank vault.
“At the front of the property, the original bank building offers incredible street appeal and (it) could easily be transformed into a charming cafe, gift shop or boutique business catering to passing tourists and locals alike,” she said.
She said the original bank vault remained, “a nod to the property’s rich history”, while a cellar was perfect for wine storage or display.
The names of former workers can still be seen scrawled on the vault’s door.
Selling SA Homes agent Ashley Williams, who was marketing the property before Ms Zapisocki, said the door had been a talking point among those who had inspected it, including those with links to its past.
“Probably we’ve had over 30 or so (people inspect the building), including a number of families that have come to see their parents’ names on the door and to take a photo,’’ Ms Williams said in June.
“They (are children of those that) have worked in the bank and live in retirement homes now so they have come and taken photos of the names and they blow them up (enlarge them) and show them to their parents as a bit of memorabilia.’’
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The kitchen includes the original wood stove along with a more modern, electric oven.
The property has one bathroom …
… and four bedrooms.
Ms Williams said an Adelaide man had purchased the property last year but ill-health had thwarted his plans to renovate the building and live there full-time.
Prior to that, it had been the home of an elderly couple, and then their adult daughter, for almost 30 years, she said.
The building’s period front exterior has been well-maintained, while a country-style, eat-in kitchen includes the original wood stove, along with a more modern, electric oven.
The home features high ceilings, spacious bedrooms, two living areas, an office and a mudroom.
Set on a 1027sqm block, Ms Williams said the ample backyard allowed for the building to be extended, if desired.
“The facade is beautiful, the architecture is amazing and it’s a fully solid brick home,’’ Ms Williams said.
“Because it was the old bank, the council want to keep the frontage as heritage but they are fine with people doing what they want inside the building.’’
The property is listed without a price guide.
– by Lauren Ahwan
The post Former Brinkworth bank with original vault back on the market appeared first on realestate.com.au.
NSW housing minister Rose Jackson caused controversy with a radio interview in 2024. Picture: Jeremy Piper
ANALYSIS
Good news, the cost of living crisis is over! Sure, it may not feel like it, but a bunch of economic experts say so.
The July Finder RBA cash rate survey canvassed a group of economists and 44 per cent of them said they believed the toughest times had peaked and household budgets were bouncing back.
Of course if you ask those people who have no economics experience, other than spending 100 per cent of their time living in the current economy and paying costs, their opinions are quite different.
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A separate Finder survey of 1014 regular Aussies came back with 88 per cent believing ‘Cozzie Livs’ (yes, this crisis has been around long enough now to have its own nickname) was still in full swing.
Interestingly, 95 per cent of Baby Boomers thought the cost of living crisis was ongoing, making it the generation with the highest proportion feeling the pain.
Gen X was next with 92 per cent, while Gen Y (84 per cent) and Gen Z (83 per cent) were slightly more optimistic about the future.
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Finder head of consumer research Graham Cooke said that “despite talk of sunshine on the way, a lot of people still feel like they’re in the middle of the storm”.
“It’s a harsh reality that’s interestingly hitting older generations harder. Many are living on fixed incomes and relying on savings, so any increase to expenses or drop in interest can be a real body blow.”
Finder head of consumer research Graham Cooke.
Cooke advised households to focus on things they could control.
“When inflation hits and prices rise, returning to normal takes a long time. You can’t put the genie back in the bottle, but you can review your household spending.
“Whether it’s switching providers for your insurance, home loan, or internet, or simply cancelling unused subscriptions, every little bit helps.”
Perception gap
Experts seem to have a knack for being on a different page to a lot of average Australians.
It may be a bank executive suggesting packing your lunch from home could go some way to offsetting massive interest rate rises. Or RBA governor Michele Bullock opting not to lower rates for the approximate 33 per cent of the adult population paying off a mortgage, despite already having paid her own mortgage off within a decade, thanks to a heavily discounted interest rate for RBA employees only?
What about NSW Housing Minister Rose Jackson, who late last year said on radio that renters ought to be able to find a two-bedroom apartment in Sydney for “a couple of hundred bucks” a week.
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Sure, maybe if they first rented a time machine and went house hunting 25 years ago.
Cooke said there’s a “healthy divide” between economists, other public figures and the general public when it comes to economic opinions.
“Everyday Aussies are usually far more pessimistic than economists,” Cooke added. “We’ve seen this in past research.
RBA Governor Michele Bullock. Picture: David Gray.
“There is also a growing divide between the property-owning class and everyone else. We’ve seen 13 cash rate increases push up mortgage costs, which were passed on to renters in rent rises. Through this period, rental stress has increased more than mortgage stress.
“Now, interest rates are coming down and homeowners are saving an average of $300 per month, but those savings are not being passed on in lower rents.
Cooke did point out that expert conclusions are typically drawn from macroeconomic data, while consumers often speak from personal experience.
“Economists who suggested the cost-of-living crisis is over pointed to comparisons between today’s indicators and those of past downturns,” he said.
“But that doesn’t necessarily reflect the gut feeling many still have when the rent is due.
“It’s fair to say that many experts would make more than the median income and in many cases feel the pinch of inflation less, but I’d suggest the disconnect in sentiment is more to do with data than being out of touch.”
The Finder survey showed that South Australia was the most pessimistic about the cost of living (93 per cent), followed by Queensland (92 per cent) and NSW (86 per cent).
The post Economists optimistic about costs, while pain continues for consumers appeared first on realestate.com.au.
Chaz Mostert is selling his luxury Queensland home. (Photo by Daniel Kalisz/Getty Images)
Supercars star Chaz Mostert is selling his luxury Queensland property, following a mammoth renovation.
The 33-year-old professional racing driver, who has two Bathurst 1000 victories to his name, listed his Gold Coast home this week.
Property records reveal he bought the Runaway Bay pad in 2015 — it has been a home base between racing with wife Riarne and their young daughter.
Chaz Mostert has listed his Gold Coast home at 235 Morala Ave, Runaway Bay.
Chaz Mostert, driver of the #25 Mobil1 Optus Racing Ford Mustang GT during the ITM Taupo Super 440, part of the 2025 Supercars Championship series Taupo International Motorsport Park in April, 2025 in Taupo, New Zealand. (Photo by Daniel Kalisz/Getty Images)
Make a splash in the pool.
“I thought ‘what an amazing block and location’ with the canal so close to the Seaway,” Mostert said.
“I saw a good house that needed a renovation to make it my dream home.”
Mostert extended the house to add extra living areas, larger bedrooms, an extra bathroom, bar, sauna, extra double garage and carport.
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One of the living areas.
Chaz Mostert, driver of the #25 Mobil1 Optus Racing Ford Mustang GT poses during the 2025 Supercars Media Day at Gravity Studios in February, 2025 in Sydney, Australia. (Photo by Daniel Kalisz/Getty Images)
235 Morala Ave, Runaway Bay.
The end result is showstopper four-bedroom three-bathroom home fit for family life.
Mostert said the property now had designer finishes and endless entertaining options including a media room with five screens and a bar area with a beer tap and bar fridges.
“(It’s a) beautiful home with all the bells and whistles,” he said.
“You can’t beat having your morning coffee watching the sunrise over the water and then the ability to jump in your boat — five minutes (and) you’re in the Broadwater.
“(It’s been) a great entertainer with multiple indoor and outdoor options even when wet weather rolls in you can close off the alfresco area with bi-fold shutters.”
An aerial view of the property.
The kitchen.
The cinema.
Standout features include a fireplace, pool, sauna and 15m pontoon.
Mostert said the home would suit anyone who was searching for a luxury property on the waterfront.
“Whether you’re into boating, entertaining or after a family home, it ticks all the boxes,” he said.
Mostert and his wife are planning to remain on the Gold Coast.
Chaz Mostert in Townsville, Australia in July, 2025. (Photo by Daniel Kalisz/Getty Images)
The outdoor entertaining area.
Enjoy your morning coffee looking out to the water.
Ray White Shore Group’s James Drake is marketing the property and described it as the “ultimate luxury waterfront entertainer”.
“Exquisitely renovated and on a 888sq m block, no expense has been spared in this grand-scale transformation.,” the listing states.
“From the stunning natural stone finishes to the premium fixtures, designer lighting and custom vanities and cabinetry, each has been carefully selected to evoke unsurpassed sophistication.”
The property is for sale via expressions of interest closing September 26.
The house is designed for family life.
The property from the water.
The post Supercars driver Chaz Mostert selling luxury Qld home appeared first on realestate.com.au.
Two in five Aussies are struggling more since rates were cut. Picture: Christian Gilles
Poorer homeowners have become worse off since the Reserve Bank announced three interest rate cuts this year, with rates of mortgage stress among the bottom 40 per cent of earners steadily climbing.
Polling from research group Roy Morgan revealed the share of lower earners “extremely at risk” of spending an unsustainable amount of their money on repayments was 5 per cent higher than a year ago.
The struggles of lower income families were a sharp contrast to the top 60 per cent of earners, who were less at risk of mortgage stress than a year ago, Roy Morgan revealed.
An estimated one million mortgage holders (18.5 per cent) were “extremely at risk” of mortgage stress in the 12 months to June 2025, down from 19.7 per cent in June 2024.
Part of the reason these benefits were not equally distributed across income levels was that higher paid households were typically getting better wage increases and some tax relief.
It was the opposite for lower paid jobs. Wages for lower income professionals were not growing as rapidly and were not keeping pace with increases in the cost of living.
Rising unemployment has also overwhelmingly affected households who were already surviving on lower incomes.
This meant that even with cheaper repayments, poorer households were falling further behind financially, and were more at risk of being lumped with loan repayments they simply couldn’t afford.
Roy Morgan CEO Michelle Levine said the data showed a clear difference in how rate cuts were impacting households.
“The benefits of these economic trends have not been evenly distributed,” she said.
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Canstar analyst Sally Tindall said struggling homeowners should talk with their bank.
“The reduction in mortgage stress was concentrated among households in the top three socio-economic quintiles, representing 60 per cent of Australians.
“In contrast, mortgage stress increased among those in the bottom two quintiles (40 per cent of Australia).”
The Roy Morgan data suggests lower income households would need substantially more interest rate relief to see a meaningful change in their financial situation.
Canstar data insights director Sally Tindall said a typical mortgage holder with a $600,000 loan would have seen their repayments drop by about $272 a month across the three rate cuts.
She said this would be equivalent to an extra trolley of groceries each month – which would be a minor benefit without an additional increase in income.
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Ms Tindall explained that most households were continuing to pay the same minimum amount on repayments following rate cuts, which was a good idea for those who could afford it.
Those who could not afford the same repaymennts needed to talk with their lenders, she said.
“It’s worrying that some people might not be making an active choice,” Ms Tindall said.
“The key is to make it a conscious decision. If you need the cash, or if you want that extra money in your offset account, rather than directly in your mortgage, ask your bank to drop your repayments and redirect the funds to where you need them.”
The post Rich vs. poor: Surprising impact of RBA rate cuts revealed appeared first on realestate.com.au.
For many Australians, a home by the water represents the quintessential dream.
However, for one New South Wales South Coast homeowner, that dream is rapidly transforming into a property nightmare as his residence of three decades slowly succumbs to the relentless erosion of a once-tranquil creek.
Bob, a disability support worker from the Shellharbour area, is watching in despair as the land beneath his home of 30 years literally slips away.
What was once a gentle babbling brook behind his property has, in recent years, become a raging torrent, aggressively eating away at his backyard.
“The whole block of land is slowly slipping towards the creek,” he tells A Current Affair, noting he has also discovered cracks in the foundation of his home as the ground continues to soften.
“Now it’s got to the stage where the front of the house is breaking apart from the foundations.”
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Bob says a raging creek behind his home is causing extensive damage to his NSW South Coast property. Source: A Current Affair
The raging creek behind Bob’s home. Source: A Current Affair
The homeowner attributes the escalating issue to a new housing development constructed uphill from his property and claims that during rainfall, a deluge of stormwater now storms past his bowing fence line, exacerbating the erosion. Bob, his wife Karen, and son Tyson are deeply concerned they will soon see internal cracks, and ultimately, lose their home entirely if urgent action isn’t taken to halt the landslip.
Footage from a recent downpour reportedly shows a stormwater drain overflowing, resembling a burst pipe, underscoring the sheer volume of water impacting the area.
The problem isn’t isolated to Bob’s property.
His neighbour, David, has also witnessed metres of his embankment disappear and large cracks emerge in his shed.
“I’ve been here 19 years, and this creek has gradually eroded away the bank to the point where we’ve only got one and a half metres of ground here now,” he says, adding “some sink holes” have also appeared in his backyard, which he admits is a “worry”.
Cracks are forming in the foundation of Bob’s home. Source: A Current Affair
Bob says the issue arose after a new housing development was constructed up the hill from his property. Source: A Current Affair
After his insurance claim for damage to his home and pool has been denied, Bob seeks assistance from the local council.
He claims that following a visit to his property, the Mayor of Shellharbour City Council promises disaster relief funding, which has yet to materialise.
In a statement to A Current Affair, a council spokesperson says the “region has experienced five significant rainfall and flood events” over the past three years.
These, they say, have “placed extraordinary pressure on local drainage systems and impacted this area”.
They also acknowledge that Bob’s property and the adjacent creek have been identified as flood-prone in Horsley Creek Flood Studies since 2011.
“Shellharbour City Council understands how distressing flooding can be for residents and has been working closely with this resident since their concerns were raised. Council has undertaken localised maintenance on the stormwater network in the street and has carried out bush care work along the creek to help improve drainage performance where possible.”
The post Torrential run-off from new builds swallowing a family’s legacy appeared first on realestate.com.au.
Home prices are growing in regional areas at a faster rate than their capital city counterparts.
Families chasing the great Australian dream of a house and a back yard, minus the budget-breaking debt, are driving a regional home boom that’s leaving capital cities behind.
PropTrack data for the past financial year shows a whopping 1672 regional areas recorded an increase in their median house price, trumping the 1588 suburbs that made gains across the nation’s metropolitan areas.
With the cost of building in far flung locations making it harder for new housing supply to keep up with population growth, regional areas are also notching some of the biggest gains with double digit growth in almost 900 of the 1672 reporting gains.
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Fewer than 750 capital city suburbs had a 10 per cent or higher uptick.
Meanwhile, the back of Bourke, long used as a reference point for the nation’s most remote bush towns, was the second strongest performing place in Australia where at least 20 homes sold — behind only the town of Mulgoa, on the very edge of Sydney’s metropolitan area.
But separate Mortgage Choice figures show debt is rising in the bush too, with home loan data for regional areas’ nationwide suggesting a 6 per cent uptick in loan sizes year on year.
Refinancing in the regions has also surged, rising 14 per cent as households grapple with a cost of living crisis.
PropTrack economics executive manager Angus Moore said regional home prices were up about 6.5 per cent nationwide, for the past year. Capital cities meanwhile were up only about 4.3 per cent.
Homes like the $299,000 101 Darling St, Bourke, have enjoyed some of the biggest price growth in the nation over the past year.
PropTrack economist Angus Moore pictured
“It’s not a huge gap, but it means you would expect to see more regional suburbs performing than in the capital cities. And that’s true nation wide, and for each state as well,” Mr Moore said.
Relative affordability, with an about $300,000 gap between city and country prices nationwide, was the key driver behind the change, as were bigger home sizes, greater tolerance for remote work.
“We are still seeing capital to regional migration, though it’s not at the level it was in the pandemic it would still be considered quite high — and higher than the average of the last decade,” Mr Moore said.
The result though, has been erosion of that affordability for homebuyers — and for tenants who are grappling with costs rising “very, very quickly” amid historically low vacancy rates.
“Obviously affordability concerns are biting pretty hard at the moment, and while mortgage rates are coming down they are still high historically — and that has pushed affordability to problematic levels,” Mr Moore said.
Of the regional areas gaining value in the past year, 1480 had a median house price uplift that topped the consumer price index in the 12 months to March 31 this year — suggesting that they are outpacing wage growth.
Homes around Lake Cargelligo have been gaining value at some of the fastest rates in the nation for the past 12 months, including this property sold for $420,000 earlier this year.
Anthony Waldron, CEO of Mortgage Choice
Mortgage Choice chief executive Anthony Waldron said the rising average loan size in metropolitan areas was leading to more buyers looking to the regions.
“These buyers vary from those considering a lifestyle change, to those looking to buy an investment property or a first home at a more accessible price point,” Mr Waldron said.
“Given the affordability pressure in metro areas, it’s not surprising to see average loan sizes in regional areas on the rise.”
Real Estate Institute of Australia president Leanne Pilkington said Covid had “changed so many things forever” and now people had different ideas of where home could be.
“There are still plenty of big businesses that are allowing people to work remotely and that’s a choice we probably didn’t have pre-pandemic,” Ms Pilkington said.
However, she warned there could be problems if regional areas outpaced major capitals for too long of a period.
Regional towns and farming districts are among some of the top performers in the property market over the past year.
Real Estate Institute of Australia president Leanne Pilkington. Picture: Supplied
“It’s happened in Byron Bay where it has become really hard for businesses to get waiters and bar staff, because they just cannot afford anywhere to live,” Ms Pilkington said.
While rate cuts might deliver some housing affordability improvements for those who own a home, she warned this would not be the same for tenants – making it likely areas that had begun to feel the strain for certain work force groups would continue to do so.
The remote NSW town of Bourke is now home to Australia’s fastest growing regional house prices, after 53 sales in the past financial year underpinned PropTrack data showing the town’s median house price jumped a hefty $180,000 (127.2 per cent) to $323,750.
Schute Bell Badgery Lumby real estate agent Shane Russell said Bourke was definitely “busier than it used to be”, but warned the past 12 months data was likely skewed as a result of differing types of homes selling, or recent renovations.
94 Darling St, Bourke, is for sale with a $270,000 asking price that would be cheap anywhere else, but is close to the norm in the regional town.
The remote landscape beyond Bourke shows how little housing options there are once you get past the remote township. Picture: Jenny Evans/Getty Images.
However, he said it had certainly doubled in the past few years due to the difficulty of building new houses when the nearest heavy machinery was located 350km away in Dubbo.
“We are moving houses in the range of $120,000-$200,000, but four or five years ago they went for $50,000-$60,000,” Mr Russell said.
“So there has been growth, but it’s really because there’s not really any new housing being built.”
Thomas Foods International reopened the abattoir in the town in 2022, which has brought jobs and fresh faces to the area, while a rising number of the areas buyers are first-home buyers looking for something they could renovate and pay less than they would in rent at a major city.
“The people who are buying now were paying $400 a week in rent, and for a $150,000 buy, your repayments are not even half that. So they are saying it’s better than paying dead money on rent,” Mr Russell said.
Where Regional Home Prices Are Growing
26 Hope St, Bourke. is listed for $265,000. A few years ago it would have sold for a fraction of that sum.
Bourke (NSW): $323,750 (median) — Up 127.2%
Lake Cargelligo (NSW): $300,000 (median) — Up 126.4%
Moora (WA): $350,000 (median) — Up 89.2%
Girards Hill (NSW): $542,500 (median) — Up 66.9%
Marburg (QLD): $969,000 (median) — Up 58.2%
Beachlands (WA): $501,000 (median) — Up 56.6%
Dundee Beach (NT): $410,000 (median) — Up 53.3%
Albany (WA): $1.128m (median) — Up 52.9%
Bowenfels (NSW): $645,000 (median) — Up 50.9%
North Beach (SA): $686,062.5 (median) — Up 50.8%
Source: PropTrack
New South Wales
282 Keen St, Girards Hill, shows what $500,000-$550,000 will get you in one of NSW’s most successful property markets of the past year.
Bourke: $323,750 (median) — Up 127.2%
Lake Cargelligo: $300,000 (median) — Up 126.4%
Girards Hill: $542,500 (median) — Up 66.9%
Bowenfels: $645,000 (median) — Up 50.9%
Cambewarra: $725,000 (median) — Up 49.5%
Lismore: $550,000 (median) — Up 43.8%
Coal Point: $1,912,500 (median) — Up 41.7%
Darlington Point: $385,000 (median) — Up 35.1%
Nyngan: $265,000 (median) — Up 32.5%
Glenning Valley: $1.16m (median) — Up 30.3%
Source: PropTrack
Victoria
Ouyen has long been known for its affordability, but rising prices mean this 5 Ritchie St home is likely worth more than ever before. It’s currently for sale for $280,000-$308,000.
Ouyen: $260,000 (median) — Up 38.9%
Rochester: $397,500 (median) — Up 32.9%
Merbein: $398,500 (median) — Up 28.5%
Donald: $280,000 (median) — Up 22.8%
Rutherglen: $585,000 (median) — Up 21%
Red Cliffs: $420,000 (median) — Up 18%
Bright: $1.1m (median) — Up 17%
Mount Pleasant: $520,000 (median) — Up 16.9%
Camperdown: $490,000 (median) — Up 16.7%
Terang: $465,000 (median) — Up 16.3%
Source: PropTrack
Queensland
This Marburg home recently sold for $767,000, cheap by local standards after a price surge.
Marburg: $969,000 (median) — Up 58.2%
Monto: $310,000 (median) — Up 47.6%
Pimlico: $570,000 (median) — Up 42.5%
North Ward: $1.2m (median) — Up 42%
Gayndah: $365,000 (median) — Up 41.7%
Aitkenvale: $530,000 (median) — Up 41.7%
Gladstone Central: $467,500 (median) — Up 41.7%
Grasstree Beach: $650,000 (median) — Up 39.8%
Rockhampton City: $375,000 (median) — Up 39.7%
Currajong: $530,000 (median) — Up 39.5%
Source: PropTrack
South Australia
North Beach is South Australia’s top performing regional housing market, with 7 Harding St showing what you get for $710,000-$740,000.
North Beach: $686,062.5 (median) — Up 50.8%
Solomontown: $295,000 (median) — Up 44.6%
Peterborough: $200,000 (median) — Up 33.3%
Waikerie: $390,000 (median) — Up 31.8%
Barmera: $384,500 (median) — Up 30.3%
Tailem Bend: $390,000 (median) — Up 30%
Crystal Brook: $327,000 (median) — Up 29.5%
Jamestown: $340,000 (median) — Up 27.1%
Tanunda: $761,500 (median) — Up 26.9%
Kadina: $463,000 (median) — Up 26.7%
Source: PropTrack
Tasmania
55 Blackwood Pde, Romaine, shows what you get for $515,000 in the town.
Romaine: $540,000 (median) — Up 17.4%
Scottsdale: $450,000 (median) — Up 15.4%
Beaconsfield: $444,000 (median) — Up 13.8%
Ulverstone: $565,000 (median) — Up 13%
Prospect Vale: $685,000 (median) — Up 11.6%
Kings Meadows: $552,000 (median) — Up 10.5%
Sheffield: $513,000 (median) — Up 10.3%
West Ulverstone: $540,000 (median) — Up 10.2%
Penguin: $605,000 (median) — Up 10%
Upper Burnie: $437,500 (median) — Up 9.4%
Source: PropTrack
Northern Territory
This Dundee Beach recently sold for $555,000 — above the local median, which is one of the fastest growing in the Territory.
Dundee Beach: $410,000 (median) — Up 53.3%
Edith: $330,000 (median) — Up 36.1%
Marrakai: $302,500 (median) — Up 21%
Katherine East: $384,000 (median) — Up 13.8%
Araluen: $585,500 (median) — Up 10.5%
Sadadeen: $462,500 (median) — Up 9.6%
Katherine: $377,500 (median) — Up 6.3%
Cossack: $692,500 (median) — Down 1.1%
Braitling: $465,000 (median — Down 2.3%
Larapinta: $415,000 (median) — Down 3.5%
Source: PropTrack
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The post Revealed: The regional towns where house prices are surging appeared first on realestate.com.au.
Experts say it’s important to finalise any loan agreements with your children.
Forget Commonwealth, ANZ, or Westpac, The Bank of Mum and Dad has entered the market and is now the 10th largest lender in Australia, with loans totalling over $35bn.
They’re guaranteeing mortgages, providing deposits, and interest-free loans, along
with a wide array of other financial benefits, such as paying private school fees.
While the Australian Bureau of Statistics doesn’t directly track this additional assistance,
various reports show that it is widespread.
According to Finder, more than 60 per cent of first home buyers receive help from their parents.
Amounts vary but can exceed $100,000.
But experts say it’s important to formalise any loan agreement with children — otherwise it’s legally considered as a gift, which can lead to problems down the track, especially if the child splits with their partner.
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Paul Etherington, Principal of Etherington Solicitors in North Sydney, says: “The beauty about codifying it as a loan agreement is that if the house is sold as the result of a breakup, that money will definitely come back to the parents.
“A loan is always a loan and must be repaid.”
Other experts, such as Diana Perla of Perla and Associates in Bondi Junction, say it’s important to keep the loan agreement current until it’s paid back in full.
“I have a client who had lent her daughter 400k when she got married,” she said.
“They had signed a loan agreement — but when the daughter and her husband separated many years later, the loan agreement had lapsed and the husband said he no longer considered it a loan and refused to pay it back.”
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One of the biggest factors is how the Bank of M&D helps young people get into the property
market by allowing them to borrow less.
As real estate prices have soared in the past few years, it often is the only way they are able to get into the market, as their savings can’t keep pace with the rising cost of housing.
“It is increasingly popular to help children get onto the financial ladder,” says Georgina
Goldsmith, financial advisor at Lux Financial Planning in Paddington.
“Interestingly, it is often framed as a benefit to the parents themselves — getting to witness their children thrive and enjoy some of the inheritance early.
“In other cases, it’s positioned as something modest — just giving them a little helping hand.
“Regardless of the motivation, we are seeing more families normalise this type of support.
“Children are remaining financially dependent on their parents for longer.
Diana Perla, of Diana Perla & Associates in Bondi Junction: “The husband said he no longer considered it a loan and refused to pay it back.” Picture: Renee Nowytarger
“The level of dependency varies, but it is a role that parents are commonly embracing.”
Generally speaking, parents have more means these days.
Over $3.5 trillion in wealth is anticipated to transfer between Baby Boomers and their offspring over the next two decades, either through inheritance or gifting.
This is why intergenerational wealth and gifting is front of mind for many, says Goldsmith.
Wanting to give your kids a helping hand is only natural — many parents are keen to see their children get on the property ladder.
But what is the best way of doing it? And how can you protect your financial interests in the case of ‘loaning’ or ‘gifting’ your kids’ money?
There are several ways you can help your kids buy a home – gifting a deposit, giving a loan, acting as guarantor, or even co-buying the property.
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But each option has different implications for the parent and the child, so the most important thing before you gift or loan your kids money is to get professional advice.
And you need to be crystal clear about what you are doing.
Is it a loan or is it a gift? Or a hybrid part loan/part gift?
“There is often confusion on the part of the parent and the adult child,” says Goldsmith.
“That’s why it is so important to engage a professional at the outset who can mediate the negotiations, document discussions and clarify the intentions in terms of a gift or a loan.
This can be crucial down the track, if there were ever to be disputes.”
If Monopoly taught us anything, it’s that money can tear apart even the most stable family.
That’s why it’s essential that everyone involved is on the same page and comfortable with the
arrangements — and understands what options they have if one side fails to comply with the
terms of that arrangement.
Paul Etherington, of Etheringtons Solicitors: “A loan is always a loan and must be repaid.” Picture: Jen Horgan
You don’t want to end up in a legal and emotional battle with your family members.
The North Sydney solicitor Paul Etherington says: “What is happening a lot these days is that parents are entering into loan agreements with their blood child, and not involving the partner, to minimise the risk of dispute.
“Buying with your kid has certain triggers for taxation.
“If you buy with your kid and own 10 percent of the property, that 10 percent is liable for capital gains tax, and also potentially land tax.”
Being a guarantor also comes with implications, advises Goldsmith.
“You need to consider whether you are in a financial position to repay the full debt, plus interest if your child is unable to do so.
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“What have you offered as security? And are you comfortable with the
possibility of selling this asset to repay the loan?”
If you’re intent to borrow for a loan in the future, guaranteeing another loan may affect your borrowing capacity.
Diana Perla, who specialises in family law, de facto relationships and property law, says that it’s not only first- home buyers, but also when people are divorcing that the Bank of M&D comes in, in particular to buy a partner out.
She also agrees that that matter of whether or not it’s a loan or a gift needs to be discussed clearly.
“Let your children work, save, and create their own wealth,” advises Etherington.
“When a parent gives money to kids, it’s considered a gift unless it’s stated as a loan – it’s
known as the presumption of advancement,” Perla says.
“If there is no loan agreement, then the parents cannot claim the money back later. It is viewed as a gift.
“People sometimes enter into loan agreements, and no-one calls on the loan, so then you run
into the statute of limitation.
“I have a client who had lent her daughter 400k when she got married.
“They had signed a loan agreement – but when the daughter and her husband separated many years later, the loan agreement had lapsed and the husband said he no longer considered it a loan and refused to pay it back.”
Sometimes parents are so keen to help their kids that they don’t take their own circumstances
into account.
Goldsmith says that plenty of parents get swept up in the excitement of helping
their children, but too often, they underestimate the impact on their own long-term financial
security.
”Parents should be aware of the various curveballs,” says Goldsmith.
“Parents should be aware of the various curveballs that can come their way throughout
retirement and how each one would impact the longevity of their capital.
Firstly, will your cashflow sustain your lifestyle across your projected lifespan? Have you accounted for large expenses such as medical bills, serious home repairs, or the cost of aged care? Are you prepared for the possibility of needing full-time assistance? You should run these scenarios with your financial advisor before making any decisions about gifting. It’s critical that generosity doesn’t come at the expense of your own wellbeing.”
While everyone wants to help their kids, they should also consider their partners in this gifting scenario. How will they be impacted by your generosity?
Etherington says that “In my opinion, you should always look after your spouse ahead of your children, because that spouse will be looking after you. To think you must put your children ahead of the spouse is wrong.
“Let your kids work, save and create their own wealth.”
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JKDS is a licensed New York State real estate brokerage firm. #10351200205