Bank of mum and dad creating property market divide

Almost 20,000 first home buyers a year receive financial assistance from their parents.

Property experts warn parental help for first home buyers is creating a ‘two-tier market’ as nearly 20,000 Australians rely on the bank of mum and dad annually.

Finder’s First Home Buyer Report 2025 – based on a survey of 1,006 first home buyers in Australia – revealed almost one in five (17%) first home buyers relied on the financial help of their parents to save their deposit, up from just 11 per cent in 2022.

Almost one in five first home buyers rely on their parents for financial help to get into a property.

Finder.com.au head of consumer research Graham Cooke said family support had become a crucial step to home ownership for many Australians.

That’s almost 20,000 first home buyers a year who were lucky enough to receive financial assistance from their parents.

Graham Cooke, head of consumer research at Finder, said family support had become a crucial step to home ownership for many Australians.

“For many young buyers, purchasing property without assistance feels almost impossible,” Mr Cooke said.

“Those who can lean on mum and dad are typically entering the market not just sooner, but in a much stronger position.

“This adds to the inequality in the market for those who don’t have this option.”

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Nearly 20,000 Australians rely on the bank of mum and dad annually.

It comes as most experts predict a cash rate hold from the RBA tomorrow, keeping it at 3.60 per cent.

Nearly one in three experts who weighed believe the ‘bank of mum and dad’ was distorting the property market.

Scott Kuru from Freedom Property Investors said: “It’s clear many younger people are only getting into the property market with help from older (and usually cashed up) family members.”

Mala Raghavan from the Tasmanian School of Business and Economics agreed.

“With a limited housing stock in the market, any demand-driven actions are bound to distort house prices,” Ms Raghavan said.

More first-home buyers were counting on the bank of mum and dad to help them with a deposit.

Michael Yardney from Metropole Property Strategists said more first-home buyers were counting on the bank of mum and dad to help them with a deposit, which is the biggest hurdle for getting into the housing market for many young families.

“This is creating a two-tier market of the haves and have-nots, families with property equity already and others,” Mr Yardney said.

Some experts believe the bank of mum and dad was distorting the property market by giving some buyers extra purchasing power.

Stella Huangfu from the University of Sydney said the bank of mum and dad was distorting the property market by giving some buyers extra purchasing power, allowing them to bid higher and enter the market sooner.

“This pushes up prices, especially in already competitive areas. It also deepens inequality, as those without family support are left further behind,” Ms Huangfu said.

On the other hand, Tim Reardon from the Housing Industry Association said family support was a natural part of a well functioning market.

“[Parents] are not a distortion, they are correcting the market distortion created by the severe lending restrictions imposed on first home buyers,” Mr Reardon said.

Experts say the bank of mum and dad is creating a two-tiered market.

Garry Barrett from the University of Sydney said intergenerational transfers had always occurred.

Craig Emerson from Emerson Economics agreed, noting “There have long been mums and dads.”

Two out of three experts believe the Federal Government’s expansion to the First Home Guarantee Scheme will encourage first home buyers to take on more debt than they should.

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