{"id":775135,"date":"2026-07-02T21:55:13","date_gmt":"2026-07-02T21:55:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/775135\/"},"modified":"2026-07-02T21:55:13","modified_gmt":"2026-07-02T21:55:13","slug":"dont-think-theres-any-shame-young-homebuyers-in-race-against-the-clock-using-bank-of-mum-and-dad","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/775135\/","title":{"rendered":"\u2018Don\u2019t think there\u2019s any shame\u2019: Young homebuyers in race against the clock using bank of mum and dad"},"content":{"rendered":"

Exclusive: Young homebuyers<\/a> are relying on the bank of mum and dad to get their foot on the property ladder and \u201crentvest\u201d before the price of new homes soar.<\/p>\n

Research from Westpac<\/a> has found the window for buying an affordable new property is closing after the imminent changes to negative gearing and the capital gains tax discount were announced in the 2026 federal budget.<\/a><\/p>\n

\"Sydney<\/p>\n

While existing homes are facing an historic downturn, the price for new builds is expecting to soar.\u00a0Henry Zwartz<\/p>\n

New builds are exempt from the diminishing tax concessions and this loophole could spell doom for investors biding their time.<\/p>\n

While existing houses in Sydney and Melbourne are facing a generational downturn<\/a>, the bank warns demand for building materials will see the cost of a new investment balloon by $100,000.<\/p>\n

Millennial and Gen-Z \u201crentvestors\u201d hoping to enter the market are panicking and have turned to their parents for help to purchase before costs skyrocket.<\/p>\n

Rentvesting is buying an investment property in an area you can afford, while continuing to rent where you actually want to live.<\/p>\n

Lachlan Brook, 31,\u00a0had just shy of a 20 per cent deposit for an investment property.<\/p>\n

The Sydney<\/a> pilot couldn\u2019t afford to buy in the NSW capital, but was able to purchase a home in Deanside in Melbourne\u2019s<\/a> west, thanks, in part, to contributions from his mum and dad.<\/p>\n

\u201cInitially, I wanted to do it on my own, so I was reluctant to ask my parents for help,\u201d Brook told nine.com.au<\/a>.<\/p>\n

\u201cHowever, it made financial sense to see whether they were willing and able to assist by acting as guarantors.\u201d<\/p>\n

\"Lachlan<\/p>\n

Lachlan Brook used his parents as guarantors to buy an investment property.\u00a0Lachlan Brook<\/p>\n

Brook didn\u2019t want to drain his parents\u2019 bank accounts but instead leaned on the equity of their existing home, saving the cost of lenders mortgage insurance (LMI).<\/p>\n

He said there still is a \u201cstigma\u201d in his generation associated with being gifted a deposit.<\/p>\n

\u201cHowever, given current house prices and market conditions, I don\u2019t think there\u2019s any shame in accepting support if it\u2019s available,\u201d he added.<\/p>\n

\u201cThere have been a few friends that have gone down a similar path that I have, to also try and get their foot in the door earlier.\u201d<\/p>\n

According to Compare the Market data, around nine per cent of buyers use guarantors.<\/p>\n

It comes with a natural financial risk to the guarantors.<\/p>\n

OpenCorp chief executive Cam McLellan said that done properly, using existing equity for investments can be a worthwhile idea.<\/p>\n

\u201cDone carelessly, it can hurt everyone,\u201d he said.<\/p>\n

\u201cNow we\u2019re seeing it regularly. The bank of mum and dad used to carry a negative connotation, like parents were spoiling their kids.\u00a0<\/p>\n

\u201cThat\u2019s changed. More parents are realising that if they\u2019re in a position to help, it can be a smart family wealth decision, not just a handout.\u201d<\/p>\n

The key is ensuring the benefactor of the guarantor can make repayments.<\/p>\n

\u201cThe families I\u2019ve seen get this wrong do it on emotion rather than the numbers,\u201d McLellan added.\u00a0<\/p>\n

\u201cThe ones who get it right treat it like a business decision.\u201d<\/p>\n

\"\"<\/p>\n

Cam McLellan, OpenCorp CEO.\u00a0OpenCorp<\/p>\n

\u2018Everything hitting at once\u2019<\/p>\n

House values have been taking a caning during the past several months due to three consecutive interest rates, changes to capital gains tax and negative gearing, as well as the impact to consumer confidence of the US-Iran war.<\/p>\n

Construction prices are expected to climb as prospective buyers ignore established homes and turn their attention to new builds.<\/p>\n

OpenCorp research found new land prices may increase from five to ten per cent, while the cost of a new build could climb by a similar figure.<\/p>\n

Investors are in a race against the block before the price of these homes surges by nearly $100,000 by mid-2027, the new data suggests.<\/p>\n

\u201cThe thing with the building industry is that if supply material costs go up, they never come back down, regardless of whether the cause of the rise has dissipated,\u201d McLellan said.<\/p>\n

McLellan anticipates a construction bottleneck over the next 12 to 18 months, too, as the approval pipeline strains under demand.<\/p>\n

\u201cIt\u2019s not one thing, it\u2019s everything hitting at once,\u201d he added.<\/p>\n

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.<\/p>\n","protected":false},"excerpt":{"rendered":"Exclusive: Young homebuyers are relying on the bank of mum and dad to get their foot on the…\n","protected":false},"author":2,"featured_media":775136,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-775135","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/775135","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=775135"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/775135\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/775136"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=775135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=775135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=775135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}