Australian parents are finding it tougher to provide financial assistance to their adult children in the wake of the GFC, but most Gen Ys are still expecting their parents to support them as they continue living at home well into their early 20s.

These are the findings of a survey commissioned by St George Bank. The survey shows 50% of parents are unable or unwilling to provide as much financial support to their kids now that their nest eggs might be a little smaller and their plans for retirement have been put on the back burner.

One of the most significant financial contributions parents can make to their children’s futures is funding part or all of the deposit on their first homes.  We saw a lot of this towards the end of the property boom earlier this decade when prices increased beyond young people’s reach.  It’s happening again now because of the First Home Owners’ Boost.

However, there will be many parents who can’t afford to do this in a post global crisis economy, which raises the question of how this will impact the Australian property market?

1. Young adults will stay at home longer.  If they can’t afford to rent, or lack the motivation to find rental accommodation, they’ll remain within the comforts of the family home.
2. Young adults will rent for longer.  Those who do leave home will rent for a longer period of time as it will take longer to save a full deposit. 
3. Young adults will buy property much later in life. Without mum and dad paying all or part of the deposit, Australia’s first home buyers will get older. Today, the average age is 33 years – up from 30 years in 1988.

My advice to Gen Y’s is to think outside the square.   There will always be opportunities to buy within your price range, so be creative and do your homework. 

1. Be creative: Consider buying a property with a friend and take advantage of the high rental yields by renting it out.  You may need to stay at home longer, but you will be securing your financial future with a property investment.
2. Do your homework:  Be prepared to put some hard yards in and do your research.  Being equipped with sound market knowledge will undoubtedly help with your decision to purchase at the right price.  

Parents deserve their empty-nester years – it’s a time for them to focus on themselves and their retirement after spending 20-30 years raising a family.  Gen Y needs to stand up, perhaps this economic climate might provide the impetus for them to do just that.