Money
Why helping your kids buy a home feels harder than ever
While the financial and emotional hurdles to buying a first home have never been higher, there are practical ways to help your kids onto the property ladder without compromising your own retirement security.
By Bron Maxabella
If you’re a parent watching your adult child do all the right things yet still go nowhere near a home deposit, you’re not imagining it. Buying a first home has become financially heavier and frankly more stressful than it was for previous generations. It’s frustrating for young people trying to get ahead, and it’s emotionally draining for their parents watching them struggle.
The fact is, home ownership still matters deeply in Australia. Across the country, the rental market has become expensive, insecure and fiercely competitive, with soaring rents, short leases and constant moving stress. Home ownership helps buy stability, control and the ability to plan long-term.
Historically it’s also been the single most important source of financial security and wealth accumulation for most families. For decades, owning your own home provided not just a roof over your head but a pathway to build equity, reduce living costs as you age, and protect against the insecurity and expense of renting.
Census and ABS data show that home ownership was once even more common than it is now. In 1966, about 71.4% of Australians lived in homes they owned either outright or with a mortgage, whereas by 2021 that share had dropped to 66% of households. That long-term decline reflects the shifts in affordability and access to property that is impacting our children now.
Building housing equity has mattered deeply for years. Households that own their homes outright by retirement spend significantly less of their income on housing costs and don’t face the risk of rent increases or insecurity of tenure. Recent Reserve Bank / ABS analysis showed that homeowners free of mortgage payments typically spend only a fraction of their income on housing compared with renters.
Recent research from the University of Melbourne’s HILDA study also highlights the stark wealth gap between homeowners and renters in later life. It found that retirees who owned their home outright had mean total wealth measured in the millions, while private renters had dramatically lower total wealth, with many retiring with under $100,000 in superannuation. The proportion of retirees renting has also risen over the past two decades.
On an emotional level, it’s frankly comforting to know you won’t be priced out of the place you call home later in life.
Why it’s tougher now than it was for earlier generations
Buying a home has never been simple or easy. But right now, it’s emotionally loaded and structurally harder than it probably was for you. There are many reasons why the next generation is facing a steeper climb, even compared with Gen X, let alone Boomers. Here are eight of them.
1. Prices have run far ahead of wages
House prices have grown much faster than incomes over the past few decades, especially in major cities. In the 1980s and 90s, buying a modest home on an average income was tough but plausible. Today, many first home buyers are chasing a moving target. How bad is it right now?
A February 2026 snapshot of housing affordability by Cotality reveals a "secondary squeeze": rising insurance and taxes now account for over 40% of the total monthly housing obligation in many areas. With the number of affordable markets plummeting by 40% over the last decade, high-demand areas now require nearly ten times the income of entry-level markets just to keep up with the total cost of ownership.
2. Deposits are eye-watering
A deposit on a median-priced home now often runs into six figures. That’s before stamp duty, legal fees and moving costs. The RBA reports that in 1990, a 10% deposit on the median-priced house was equivalent to around 25% of average annual household income. Today, due to the rapid price growth of the early 2020s, the figure is closer to 50% in many metro areas. Stamp duty adds to that gap: calculated at NSW rates on the median-priced house in Australia, it was equivalent to 6% of annual income in 1990. Today, it’s closer to 17% in many regions.
3. Rent is swallowing savings
Rents have steeply climbed in recent years, meaning would-be buyers are paying someone else’s mortgage while struggling to save for their own. This double bind didn’t bite as hard decades ago when rent required significantly less of people’s overall income. While you wait to buy, it's also worth checking for any invisible money leaks in your home that could be further draining your deposit savings.
4. Student debt delays momentum
This financial year (2025-2026) the government made changes to student assistance (like HECS, HELP, SSL, etc) repayments. They are now calculated using marginal rates, which means most people with student debt should keep more in their pocket each pay check. However, carrying a HECS-HELP debt still significantly reduces borrowing power.
Gen X parents will relate to this one, but the difference is how much student debt people carry when finishing their degrees. In 1989, the average was $1,800 per year; as of May 1, 2026, the average outstanding balance is approximately $21,800 according to the latest figures from the Australian Taxation Office (ATO) following the 20% balance reduction applied in 2025.
5. Lending rules are stricter
Prudential reforms have made banks more cautious, which is sensible, but it means borrowing power is tighter than it once was. Interest rate buffers and serviceability tests hit first home buyers hardest.
6. Job security looks different
Contract work, gig income and career changes are common now. While flexible, they can make lenders nervous.
7. Location trade-offs are bigger
Buying close to work, family or community often costs far more than previous generations paid for the same privilege. Moving further out can mean longer commutes and weaker support networks.
8. The stakes feel higher
With retirement increasingly linked to housing security, buying a home now feels less optional than it once did. Parents know owning later in life reduces financial stress.
The emotional weight parents carry
Here’s the part no spreadsheet captures. Parents don’t just want to help financially. They want to ease anxiety, restore hope and give their kids a fair shot. But many don’t have spare cash lying around. And even if they do, risking retirement security feels terrifying. No one wants to be generous now and vulnerable later. That tension can quietly sit at the dinner table for years.
Kids feel it too. Accepting help can bring guilt and embarrassment. There’s pride at stake. There’s also urgency. They can see prices moving faster than their savings and worry they’ll miss the window altogether.
Practical ways parents can help right now
- Talk openly about money and without judgement
- Help kids understand borrowing power and realistic price ranges
- Get independent financial advice so everyone understands the risks and protections
- Set clear boundaries to protect your own retirement plans
Feature image: iStock/Milan Markovic
This article contains general information only. It is not financial advice and is not intended to influence readers’ decisions about any financial products or investments. Readers’ personal circumstances have not been taken into account and they should always seek their own professional financial and taxation advice that takes into account their financial circumstances, objectives and needs.
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