RBA’s Stevens says parents will have to help kids buy property
The only way many young Australians will be able to enter the housing market is with help from their parents, the head of the RBA has said.
Outgoing Reserve Bank governor Glenn Stevens has told News Corp that rising housing costs mean many young people, particularly in the Sydney market, will only be able to afford property with the help of their parents.
“I think that a lot of people of my generation are actually going to find themselves, if they haven't already, helping their children into the housing market because that may be almost the only way that their children can enter the Sydney market," Stevens said.
Stevens said this could end up eroding the wealth of baby boomers.
"That, of course, means that for people of my age, that the wealth we think we have in our house, actually, we don't have quite as much as we thought because we're going to have to give some of it to the next generation,” Stevens told News Corp.
Stevens also warned of consumers putting too much faith in house prices continuously rising.
“I think that the assumption that there is an easy road to riches through leveraged holdings of real estate, it strikes me that however much that may have succeeded for some in the past, that is not a great strategy and prices can fall,” he said. “They have fallen. I think while I’ve been in this job we’ve seen them fall two or three times.”