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Reserve Bank Admits The Best Way For Aussies To Buy A House Is To Rely On Their Parents

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Reserve Bank Admits The Best Way For Aussies To Buy A House Is To Rely On Their Parents

The Reserve Bank of Australia (RBA) has revealed the best way Aussies can get into the property market.

You wouldn't be alone in thinking that home ownership in some parts of Australia is a far-away dream.

Low interest rates and a booming property market has seen some homes go for hundreds of thousands of dollars above the asking price and no one knows when the gravy train is expected to run out.

If you're one of the people who have saved enough money for a deposit, only to get massively outbid at an auction, well the RBA has some advice: get your parents involved.

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RBA assistant governor Luci Ellis appeared at the Standing Committee on Tax and Revenue for an investigation into Australia's housing affordability and supply.

Credit: Alamy
Credit: Alamy

It was there that she explained how potential home buyers will stand a much greater chance at their dreams if their parents already own a home.

"There's a mechanism by which children can relatively easily end up being home owners," Ellis said.

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The mechanism she's referring to is where the parent or parents use the equity from their property to get a decent home loan for their child or children.

According to Business Insider, the next best thing is simply getting your parent to put their home down in their will and the child will be a homeowner via inheritance.

Lovely to know that you just have to lose a parent to get onto the property ladder.

Luci Ellis said the children of parents who are renting their current property 'are going to be in a much more difficult situation'.

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It's nuts to think that the standard way of buying a home has changed from doing it all by yourself to getting your mum or dad involved.

Credit: Alamy
Credit: Alamy

Some people won't have that sort of relationship with their parents or they might not be in a financial position to help. Then what?

The RBA Assistant Governor admitted that 'some people will find it easier to purchase a home than others based on the socioeconomic position they were born into'.

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Here's the kicker: the longer you wait in life to get onto the property ladder, and therefore pay off your mortgage, the harder your life will be.

"If you own your own home at the point you retire that's basically the thing you need to do to not to be in poverty in retirement," Luci Ellis said.

Great, so you better get on the phone and ask mum or dad about property.

Featured Image Credit: Alamy

Topics: Australia

Stewart Perrie
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