Real Estate
Rising Home Prices Prompt Millennials to Move Back In
As median house prices soar and the wage gap widens, data reveals that adult children are having to move back in with mum and dad as a recourse to save for a deposit. Children already at home are also choosing to stay in the nest for longer.
“If words like ‘kidults’ and ‘boomerang children’ are increasingly popping up in your conversations, it’s because kids are living at home for longer,” explains Domain Property Editor, Alice Stolz, on Today.
A study from the Melbourne Institute on household dynamics shows that almost a third of 26- to 29-year-olds were living at home in 2021, a significant shift from 2001.
“It really is based around the fact that house prices have doubled in some parts of the country and the time to save a deposit has increased so much and is much harder,” Stolz explains.
Domain data shows that in Sydney, the 20 per cent deposit required to buy a property has more than doubled between 2013 and 2023, from $151,000 to $319,000, with hopefuls needing an extra $168,000 to add to the honey pot – with wages failing to keep up with soaring house prices.
In Melbourne, that figure was $114,000 in 2013 and now sits at $209,000 as of December 2023.
Since 2012 to 2023, average wages rose about 30 per cent, on ABS data. Dwelling prices across the capital cities have jumped close to 90 per cent.
“Often, moving home rent free or even paying a lodging amount to parents [makes it] so much easier to get that deposit than having to pay rent at the same time,” says Stolz.
A new report has also found stamp duty is costing buyers over five times more than what it did just one generation ago.
For those able, choosing to remain in the family home can be the opportunity needed to crack into an increasingly aggressive housing market.
But Stolz advises on how to keep things harmonious for everyone involved, especially mum and dad.
“Many people can actually enjoy this unexpected bonus time, but I do think boundaries are required. So for adult kids doing this, you can’t behave like a 13-year-old, you need to chip in and contribute, and have an egalitarian household.”
This includes not treating the home like a hotel, contributing to household needs whether that be through chores or some money towards utilities or groceries, and being disciplined about savings goals.
Parents are encouraged to respect boundaries and split household chores.
“It’s a rare chance to live rent free, so make the most of it,” confirms Stolz.
“For parents, you’re giving your child a priceless chance to get a really big headstart in life, so be really proud of what you’re doing for your child.”
Further confirming the property market is strong despite inflation and mortgage hikes, auction clearance rates for last weekend’s Super Saturday were robust, with 70 per cent clearance in Adelaide, 67 per cent in Sydney, 62 per cent in Melbourne, 52 per cent in Canberra and 49 per cent in Brisbane.
In other housing news, the final Block house of Leah and Ash for $3.125 million, after famously passing in at the auctions last year.
Domain exclusively revealed a deal was inked last Thursday evening after a bidding war for the property broke out between two buyers, one of whom is understood to have been a high-profile celebrity.
“It went to a buyer who is apparently based in Malaysia,” says Stolz. “This made Leah and Ash come third in the final Block auction order, so it goes to show good things come to those who wait and if you pass in it doesn’t always mean you’re not going to make some money.”