With reports that the housing market is getting more difficult for young people to buy into, a Hunter finance expert says he has seen a rise in the up-take of loans that use relatives’ property as equity.
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The Australian Bureau of Statistics issued revised figures last month showing the number of first home buyers had almost reached a record low – 13.2 per cent of all home buyers.
Greater Bank lending manager Chris Baguley said, anecdotally, family pledge loans had become an increasingly popular way for young people to buy their first property.
“Traditionally, parents who want to help their kids out might gift them a deposit,” he said.
“But this method of doing things means they don’t have to actually give up any cash – they are only giving up equity in their property.”
Allan Shaw and Ashley Wilton, both 23, recently bought their first home in Ashtonfield and have moved in with their baby daughter Ava.
“We’d still be living at home with mum and dad [if not for a family pledge loan]. It’d be a pretty crowded house,” Mr Shaw said.
