A first-home buyer has spoken about the grim reality of trying to get into the property market, admitting she had to wait for the “bittersweet” gift of a family inheritance before she could buy a property.
Abby Rose Brandwood, 31, and her partner Zachary, 22, had saved $20,000 for their first home and were pre-qualified to buy a property under the first home guarantee scheme, where the government effectively backs their home loan.
But the Gold Coast couple still needed at least another $60,000 or $70,000 to enter the local property market with a 5 to 10 per cent deposit.
Abby, who works as a midwife, admits that for years she “never aimed to save for a home loan because she felt like it was out of her reach.”
“Especially as a mature-age student working on unpaid internships, living away from home, paying rent, regular expenses, having a life and managing relationships, I found it increasingly difficult to even consider saving for a home loan,” he said. to Daily Mail Australia. .
“The short-term goal was to save for the next car service, the next rental bonus, or the next emergency.”
But when Abby’s beloved grandparents, Keith and Celia Brandwood, died within a year of each other, her father decided to gift part of his inheritance to her and her brother so they could “settle down” for life.
Abby Rose Brandwood, 31, and her partner Zachary, 22, had saved $20,000 for their first home and were pre-qualified to buy a property under the first home guarantee scheme (the young couple is pictured together)
“When my father told me this was his plan on behalf of my grandparents, it was bittersweet,” Mrs. Brandwood said.
‘We had to lose two of the most generous, kind and beautiful people to receive such a gift.
“What seemed like a pipe dream: owning property was now within our reach and that is thanks to them.”
His partner Zachary, who has been working as a chef since he was 14 and was raised by his mother, has always had the goal of having his own place.
“I already had a portion to put up for the deposit we needed,” Abby said.
“Buying together has been the smart choice, in terms of loans, repayments and asset building.”
But Brandwood is under no illusions that she and Zachary would not have been able to get a foot on the property ladder without the help of their grandparents’ estate.
“They were always generous people who worked very, very hard as young adults while raising my father and my aunt,” she added.
Abby, who works as a midwife, admits that for years she “never aimed to save for a home loan because she felt like it was out of her reach.”
Abby is under no illusions that she and Zachary would not have been able to get a foot on the property ladder without the help of their grandparents’ estate (pictured: Abby’s beloved grandparents, Celia and Keith Brandwood).
“They owned businesses, invested, managed a property portfolio and did all that after initially moving alone with two young babies to Australia from the UK, with no family here to support them.”
The couple currently rent separate shared houses in Broadbeach.
Mrs. Brandwood shells out $450 a week and Zachary shells out $200 for a four-bedroom house.
Previously, only studio or one-bedroom properties outside of desired neighborhoods were available.
But now, with their joint savings and inheritance, they have a budget of around $700,000.
They hope to buy a two or three-bedroom property on the Gold Coast early next year.
Ma Brandwood said many of her friends and colleagues faced similar situations of not being able to buy a property without the help of the bank of mum and dad.
“I have generous parents who certainly live within their means, work very hard for the life they have, and always managed to support me and my brother while we attended college and lived away from home,” she said.
‘They showed us the desire and work ethic to get ahead, but that no longer seems enough.
‘We just need one foot in the door, that first step has to be more accessible. The cost of living is increasingly higher, making saving increasingly difficult.
“Life is not about slaving just to pay a mortgage, life is about living, so how can we do both?”
Ms Brandwood is certainly not alone, as experts in the field increasingly see home buyers waiting for their inheritance before they can purchase a property – and there is even a name for it.
More and more home buyers are waiting for their inheritance before they can buy a property (Australian file image)
(Pictured: Tenants queue for an inspection in Bondi, Sydney)
money.com.au Home loan expert Mansour Soltani told Daily Mail Australia that “inheritance dependency” is becoming common among first-home buyers.
“There is definitely a generational wealth transfer taking place and it will only become more common as property becomes less affordable for a typical 20- to 40-year-old borrower,” he said.
“Cash gifts of $400,000 or more from parents or inheritances from grandparents are not uncommon.”
Soltani said lenders take inheritance into account when people apply for a loan and typically treat it as a cash gift.
“(But they) require a legal declaration that your cash transfer is a gift or inheritance, and not a loan,” he said.
“This means you will have to save a deposit yourself and won’t be able to rely solely on inheritance to cover it.”
Soltani added that although waiting for inheritance has become a popular measure, he warned that it can be “risky.”
“People could stop saving altogether, assuming a windfall is guaranteed,” he said.
‘Furthermore, receiving an inheritance, even a large one, does not guarantee that the bank will grant you a mortgage.
‘You have to show signs that you can save money on your own and that you are financially responsible.
“The moral of the story: access to capital is not enough; banks need to see that you can manage money responsibly and manage debt over the long term.”
Buyers Collective founder Jack Freestone has also noted the tendency of buyers to rely on an inheritance as part of their purchasing “strategy.”
“With housing affordability being a major challenge, it is becoming a critical financial resource for many first-time buyers who would otherwise be unable to close the gap between their savings and the required deposit,” he said.
Freestone said the cost of living and skyrocketing house prices have prevented first-home buyers from saving.
“Many are strained even with dual incomes and strict budgets, making it nearly impossible to achieve homeownership without additional support such as inheritance or family assistance,” he said.
But he said waiting for an inheritance can come with issues people should be aware of, including “frustration and uncertainty” for buyers.
“There is also the emotional complexity of tying such an important financial goal to a family event like death.”