Your kids want to leave the nest… but can they afford one of their own?

We’ve all heard it – “I’ll never own a home,” “Rent is too high,” or even “Boomers had it easy.” While every generation faces its hurdles, let’s be honest: when it comes to housing affordability, Millennials are actually not wrong.

A major recent finding from the Australian Property Institute (API) Valuation Report has concluded that while the value of housing has increased substantially over the last 50 years, the ability of Australians to purchase a home has worsened. Today’s 30–34 year-olds are the first generation in more than 47 years where most don’t own a house. Looking ahead, projections for 2030 indicate that 43% of individuals aged 45-54 will likely not own a home (Source:  2030: The Big Shift: Seven megatrends set to usher in a new world of advice, Deloitte, 2024).

These staggering statistics are further cemented by unprecedented average house price growth across the country between 2005 and 2024 .

The graph below shows:

• Teal bars represent the percentage increase in house prices across Australian cities.
• The orange line shows inflation (67%) over the same period, highlighting how much house prices have exceeded it.
• Navy dots indicate how many years of average annual income are now required to purchase a median-priced home in 2024.

Fifty years ago, in 1975, Sydney homebuyers needed 4.2 times average ordinary time earnings ($7,600 per annum) to buy a home. By 2024, the average ordinary time earnings were higher ($102,000 per annum),  but so were average house prices, and they’ve risen at an astronomical rate to 13 times the average yearly income. Similar trends are seen in Melbourne (from 3.5 to 8.4 times) and Brisbane (from 2.9 to 8.3 times). Nationally, the ratio has climbed from 3.4 to 8.1 times, helping explain why younger Australians are struggling to save and afford a home amidst rising living costs (Source: Surprising winners from first-ever study into Australian property values, The Australian Property Institute, 2025).

Helping children without “breaking” the Bank of Mum and Dad

The term ‘The Bank of Mum and Dad’ has grown in popularity during recent years, as has its prominence in the Australian housing market. Astonishingly, Mum and Dad lenders are now the fifth largest mortgage lender in the nation. Parents are thinking beyond “am I going to be okay in retirement?” and are now taking an active approach to not only secure their financial future, but also that of their children.

John, a client with a solid retirement strategy, sought ways to set his three adult children up for long-term financial success. Three years ago, we crafted a strategy whereby he borrowed against his significant property portfolio to invest in private market assets, with a 5-8 year investment horizon. This strategy aimed to leverage high-growth, non-public investments such as direct property, debt, infrastructure and private equity, aiming for 10%+ returns over time.

At the end of the investment period, John plans to distribute the returns among his children to help with major life goals, such as purchasing a home or investing in shares. To ensure transparency and fairness, the distribution will be formalised through a loan agreement, outlining terms and conditions to maintain financial clarity and mitigate tax implications. This approach highlights the value of proactive wealth planning, providing his children with the means to build their own financial futures while protecting his long-term wealth goals.

Another example saw us advising a married couple who sought to support their son through key life stages by applying strategic financial planning and legal foresight. In 2020, when their son (and partner at the time) was buying their first property, our clients restructured a financial gift for their son into a formal loan agreement to safeguard family interests - an important protection that proved effective when his relationship later ended. 

One of the couple sadly passed away a few years later, which activated the family's legacy planning, life cover, and structurally efficient tax strategies, ensuring smooth wealth transfer and ongoing financial security to the surviving client. Recently, the widowed client continued this legacy of support by guiding their son through the purchase of an investment property, ensuring he had the backing of a buyer’s advocate, a lending team, and pre-approval. 

These approaches reflect a proactive and protective approach to intergenerational wealth, combining foresight, legal safeguards, and strategic planning to strengthen their family’s financial future.

Helping you create a holistic, generational approach for your family 

A common challenge many older Australians face is when their health turns and their children don’t live nearby to provide support to them, not because they don’t want to, but simply because they cannot afford to. Traditional retirement planning has often only looked at that couple or individual’s financial needs and not necessarily the goals of the following generations.

We help clients explore how their financial position, such as through capital, cash reserves or home equity, can support their children to buy a home.   Strategies such as earlier gifting, tailored gearing, and long-term asset allocation can be used to build family wealth and enable a thoughtful generational transfer.

By viewing retirement, aged care, and wealth transfer as interconnected, families can create financial security that allows children to live closer, support loved ones, raise their families, share in life’s later chapters, and enjoy the fruits of your labour with you, rather than after you. 

 

At Partners Wealth Group, we develop strategies that balance your retirement needs with the broader family picture. Whether it’s investment planning, securing finance, or legal structuring, we’re here to help protect and grow your family’s future.

If you’d like to discuss your situation with a specialist, please do not hesitate to contact our office on 1800 333 143 or you can request a call back.  

 

This information is general in nature and is provided by Partners Wealth Group. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.