The concerning factor believed to be behind surging house prices

Monday, 3 November 2025 08:30

Family financial help is creating a two-tier housing market of the haves and have-nots, experts fear.

Ahead of tomorrow's interest rates decision by the Reserve Bank of Australia, the impact of the bank of mum and dad on home prices continues to stir debate.

The cash rate is hotly tipped to remain on hold at 3.60 per cent when the RBA hands down its decision at 2.30pm tomorrow, leaving hard-pressed mortgage holders disappointed.

The forecast was supported by a survey of economic experts by comparison site Finder that found 30 from 35 expected no change.

GEN23: Generics for lease signs, for sale signs, sold signs residential construction, For Sale, Lease, Rental, Home Buyers, Home Sellers, Renters, Real, Estate, Property Market, Realtor, Home, House, Property, Residence, Housing market, housing crisis, in the western suburbs, Thursday 14th of December 2023. Photo: Dion Georgopoulos / Australian Financial Review

But economists and analysts showed far less unity when quizzed about the effects of parents giving their children financial support to gain a foothold in the housing market.

New Finder research – based on a survey of 1006 first-home buyers – revealed 17 per cent relied on the financial help of parents or family to save their deposit, up from 11 in 2022.

That's the equivalent of almost 20,000 first home buyers a year who were lucky enough to receive financial help from their parents.

Finder head of consumer research Graham Cooke said without it, property ownership would be out of reach for many young people.

"Those who can lean on mum and dad are typically entering the market not just sooner, but in a much stronger position," he said.

But while it's giving some lucky few a leg up, nearly one in three experts canvassed by Finder believe it is also distorting the housing market.

Among them are Michael Yardney, from Metropole Property Strategists, who thinks a twin-track housing market is evolving.

"This is creating a two-tier market of the haves and have-nots, families with property equity already and others," he said.

On the other hand, Tim Reardon from the Housing Industry Association said family support is a natural part of a well functioning market.

"[Parents] are not a distortion, they are correcting the market distortion created by the severe lending restrictions imposed on first home buyers," he said.

There was also concern about the impact of the government's First Home Guarantee Scheme, which will allow all first home buyers to purchase a home with only a 5 per cent deposit instead of the usual 20 per cent.

From the 26 experts canvassed, 65 per cent think it will encourage first home buyers to take on more debt than they should.

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