Understanding the motivations and nature of Australian parents assisting their children to enter the housing market

Source abstract

As housing markets become increasingly unaffordable, there has been growing interest in the role of intergenerational transfers for enabling first homeownership. However, there is little understanding of parents’ motivations to assist their children and how these motivations are formed. Drawing on semi-structured interviews and focus groups with Australian parents, we find that while parents appear largely motivated by altruistic intents, with little expectation of direct reciprocity, the divide between altruism and reciprocity is often blurred by evidence of indirect, hidden or heritage driven reciprocities. In terms of fairness concerns, parents with multiple children are keen to ensure fair treatment across siblings, but we find that parental concerns for fairness extend beyond the family to addressing intergenerational unfairness. Important, some forms of parental assistance are fraught with financial risks, and some parents also exhibit an aversion to loss of family wealth to children’s future partners and apply intentional strategies to mitigate this risk when their children form new relationships. Thus, in practice, parental support for children’s home purchase is a highly complex endeavour that challenges traditional economic assumptions of rational choice.