Parental help coming back to bite first homebuyers
But experts warned that those who borrowed money from their parents to fund a property were twice as likely to default on their mortgage within five years.The reasons varied, but one prominent risk factor was that the parental assistance was backing up homebuyers who may otherwise not have been able to afford their purchases.
“Our data identifies key markets across metro and regional NSW where home values are starting to fall, which increases the risk of negative equity for some previous purchasers. This usually meant a lower deposit on the purchase, which would be a risk as prices fell. There was also a risk for the parents drawing out equity from their home.
“Throughout our dealings with buyers, financial assistance to fund a deposit has been a factor,” Mr Horne said.
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