It's an age old question.
Which generation had it better?
The debate over whether older generations faced unfair advantages to purchase property has soured family gatherings throughout the world.
The answer is complex.
Baby Boomers and Gen Xers faced different hurdles to homeownership, with the Australian cash rate sitting at 17% in 1990 and the average mortgage size for owner-occupiers just under $68,000.
Fast forward to February 2023, now the cash rate is 3.85% and the average loan is $585,557, according to the Australian Bureau of Statistics (ABS).
The nation’s average annual wage has also more than tripled since the ‘90s when the average Australian full-time worker earned $566.60 per week. According to ABS data, the average full-time adult worker now earns $1,807.70 a week, or $94,000 annually.
While much has changed, the percentage of income needed to make repayments on a home in 1990, and in 2023, is roughly the same.
The Bank of Mum & Dad comes to the rescue
Millennials and Gen Z were more likely to get help from their parents and family to purchase their first home than their older counterparts.
More than 30% of Gen Z and 26% of Millennials say their family helped contribute to the deposit.
Meanwhile, more than 50% of Gen X and Baby Boomers say they had no help from family members whatsoever.
The age group that said they were solely responsible for the purchase of their first home were Gen X (41%), Baby Boomers (35%), Millennials (22%), then Gen Z (14%).
Compare the Market’s General Manager of Money, Stephen Zeller said the rising cost of house prices meant saving for a deposit could be more difficult for young people today.
“Juggling the rising cost of rent, with inflationary pressures, would make it undoubtedly difficult to save for anything, let alone a deposit.
“It’s not surprising more parents are helping their children cross that first hurdle. But not all parents have capacity to support their children’s deposit.
We may see a greater wealth gap in the years to come.”
