The Grandparent Effect: Reshaping Brisbane's First Home Buyer Landscape
The Baby Boomer generation, predominantly comprising today's grandparents, is exerting a significant influence on Brisbane's property market, particularly for first-time buyers. This "Grandparent Effect" is reshaping affordability dynamics and creating new pathways to homeownership for younger generations.
Wealth Distribution and Transfer
Despite making up only 21% of Brisbane's population, Baby Boomers control an impressive 48% of the city's private wealth. Over the next two decades, an estimated $6.2 trillion is expected to be transferred to younger generations, significantly impacting the first home buyer market
Grandparent Support in Action
The role of grandparents in supporting first-time buyers is becoming increasingly prominent in Brisbane:
Financial inheritance (13% of Australians receive this)
Rent-free or reduced rent living arrangements (11%)
Childcare assistance to reduce costs (11%)
Financial support for bills (11%)
Education expense contributions (9%)
Generational Comparison
The contrast between Gen Z and Baby Boomers in terms of grandparental support is stark:
17% of Gen Z receive financial support for education (8.5x more than Baby Boomers)
12% of Gen Z receive help to buy a home (6x more than Baby Boomers)
20% of Gen Z have lived with grandparents for free or reduced rent (4x more than Baby Boomers)
16% of Gen Z receive support for overseas travel (16x more than Baby Boomers)
Impact on First Home Buyer Affordability
This trend is having a dual effect on Brisbane's first home buyer market:
Improved Affordability for Some
For those receiving substantial grandparental support, the path to homeownership is becoming more accessible. This financial backing can help overcome the significant hurdle of saving for a deposit, especially in Brisbane's rising market.
Potential Market Distortion
However, this trend may inadvertently create a divide in the market. First-time buyers without access to grandparental support may find themselves at a competitive disadvantage, potentially exacerbating affordability issues for this group.
Grandparents' Concerns and Intentions
Brisbane's grandparents are acutely aware of the challenges facing younger generations:
77% are concerned about rising living costs
72% worry about increasing housing costs
42% fear economic downturn
In response, 32% of grandparents intend to pass on 50% or more of their wealth directly to their grandchildren, potentially providing a significant boost to first-time buyers in Brisbane.
Long-Term Market Implications
As Brisbane's grandparents continue to play an active role in supporting younger generations, we can expect to see:
Increased competition in entry-level property markets
Potential for earlier entry into homeownership for some buyers
A shift in traditional financial planning and inheritance patterns
Growing disparity between buyers with and without family financial support
This "Grandparent Effect" is reshaping Brisbane's first home buyer landscape, creating both opportunities and challenges. While it's improving affordability for some, it may be inadvertently raising the bar for others. As this trend continues, it will be crucial for policymakers and the property industry to consider its broader implications on market equity and overall affordability in Brisbane's housing market.
Could this be Relevant For You?
If you are thinking of purchasing a property and are unsure if you are eligible for any government grants or if family can assist in your property purchase we are here to help. We work with finance professionals who are more than happy to explain and give you some insight into whether there is an opportunity and conversely if you are a parent or grandparent we can assist with providing a scenario that can act as blueprint for success. We would like to take that load from you and do the hard yards to make sure we secure a home that you and your family will make years of memories in.
