A new class of buyer is proving a formidable force in the Australian property market and they’re not going away anytime soon.
Baby boomers are going head to head in the race to get their children on the property ladder, sometimes proving ferocious auction bidders, say industry professionals.
Real Estate Buyers Agents Association (REBAA) president, Cate Bakos, said there were an increasing number of parents, particularly dads, bidding in force in the nation’s auction capitals.
“Certainly in Melbourne we’re seeing a dominant presence of parents who are bidding on their children’s behalf, many of whom are quite competitive especially when there are two or three dads fighting it out,” she said.
“Children often turn to a parent as they navigate adulthood and when it comes to commercial decisions, more often than not, it’s dads who are called upon.
“The problems arise when dads start bidding out of competitive spirit more than strategic support, securing properties where a valuer may query if the Loan to Value Ratio is precariously high.”
Ms Bakos said government incentives were encouraging more first home buyers into the market anyway, but for those who are enjoying a little help from ‘The Bank of Mum and Dad’, (now formally recognised as Australia’s fifth biggest lender), this contingent are shaking things up for their opposition bidders.
She said there were numerous ways parents could help their children get into property from gifting deposits to family pledge loans, earmarking properties in Trusts for future gifts and even paying a buyer’s agents’ fee.
“We see parents assisting their children on a regular basis, from moral support at opens and auctions, to financial contributions,” she said.
“Whatever the method that works for each family, there are certainly many first home buyers who have the added advantage of some turbo-boost to their budget.”