How parents can help their kids get onto the property ladder
Affordability issues have eroded the dream of home ownership for many millennials, particularly in major cities where price hikes outpace the time it takes to save a deposit.
For parents wanting to see their children reach their property goals, the challenging climate can be just as frustrating – particularly if they’re not in a position to contribute financially. So, how can first home buyers get a leg up on the property ladder, and what can their parents do to help?
For Tor Roxburgh, the first step was teaching her three kids to diligently save money – no matter how small the amount. Second was being open to non-conventional housing options, which have emerged to meet a changing landscape.
This is what led her to the Assemble Model – a housing model that bridges the gap between renting and owning your home, allowing residents to lease their home for five years while they save for their deposit.
Unlike other rent to buy schemes that can be considered risky, with the Assemble Model, rent is agreed upfront at a market rate and residents can get their bond back and keep their savings if they decide to leave. There’s also ongoing support and financial coaching to help them reach their goal.
Tor went along to one of the community presentations and gathered information to show her son, Caspar (30) and his girlfriend, Elisa (27), who were living overseas and planning their return.
“I didn’t want any of my kids living in one of those apartment buildings with few windows and natural light; I had a look at one-bedroom apartments in these type of buildings with my daughter and they were really shocking,” Tor says.
“What really appealed to me about Assemble was the collaborative design aspect. The Assemble team works with the community that is going to live there and incorporates their thoughts and needs into the design… things the residents are going to want and that they’ve helped conceive.”
Taking the leap
When Caspar and Elisa returned to Melbourne, they entered the ballot for Assemble’s 393 Macaulay Road in Kensington and secured a two-bedroom apartment in the building, which is now fully allocated. They were drawn to the project’s inner-city location, community focus and flexibility.
“To get a nice place not far from the centre of the city, you dream of it… everyone thinks about buying a house one day and I’d been saving for a long time,” Caspar says.
“If I was signing a contract to buy now, rather than rent first with the option to purchase later, there’s no way I would have signed. The Assemble Model gives me the flexibility I need at this time in my life… [Elisa] and I are both travelling a lot with work and it’s likely we’ll need to relocate for a period in the next five years. With Assemble, we can wholly sublet the apartment for a maximum of two years. It was a deal-breaker for us.
“We were attracted to Assemble’s quality design, with lots of natural light, and they’re deliberately not done on the cheap. There are so many rubbish apartments out there; I know because we looked at renting them.”
“We liked the community aspect,” Elisa adds. “The model is people-oriented.”
The project’s design includes a range of communal features such as a lending library, kids’ sandpit, herb garden, dog-washing space, a workshop and a multi-purpose community room.
Providing a boost
Tor says she wanted to kickstart her kids’ saving habit by setting up an account for each of them, and then divvying up $3000 she’d received from her late father. She contributed about $30 a month into each account for over three years, as an incentive for them to keep saving.
“All of my kids felt really hopeless about their prospects of getting to the property market, so it was really important to help them get started with saving and taking concrete steps to take control of the process,” she says.
“It was a very token amount that I co-saved, but they have all continued to save based on that initial stimulus. Housing is so difficult now that if you’re going to have a chance of getting a deposit together, that is what it takes.”
Caspar echoes that sentiment and the significance of every little deposit.
“[Mum’s] message was that just because it’s difficult, doesn’t mean you shouldn’t try; that we should be aspirational. At first I was laughing at the idea of being in a position to buy – that was eight years ago. But the savings started to build up and it was really helpful psychologically.
“I saw that if you plug away, saving even a little bit, it adds up. Time is your friend.”
Find out more about the Assemble Model and upcoming projects here.