A recent Australian Institute of Family Studies report found that around 20% of people in Australia live in a “multi-generational household” with more than one generation of related adults living under the same roof1. Children are also waiting longer to leave the nest, with more than 40% of children in their early 20s – and almost 20% in their late 20s – still living at home.
For some time, baby boomers have been ‘caught in the middle’ caring for elderly parents while continuing to raise or support their own children or grandchildren. And with many children of Gen X parents now reaching adulthood but choosing to stay home, it’s becoming more and more common for a family household to include grandparents and/or adult children. While some elderly parents are sharing a home with their grown-up kids, this data suggests the overall trend is being driven by young adult children sticking around for longer.
A big factor is financial - in particular housing affordability. The rapidly rising cost of property has put home ownership out of reach for many younger Australians. The average house price in Sydney today is 13.3 times the average full-time annual income and Melbourne is 9.9 times higher than the median household income2. This may explain why Gen Y has become more preoccupied with spending on people and experiences over buying property3.
The issue of being able to afford a home isn’t just one for the 20-somethings. Even when others have taken the leap and purchase a property, housing affordability can drive them back to their original family home, sometimes with their own young children in tow. This ‘Boomerang’ generation includes around 1 in 4 Australian adults who have moved back home at some stage4. Research shows that 26% of all households have an adult child living at home5.
While it’s natural for parents to want to help their children, extra financial commitments can limit spare cash available to put towards retirement savings. This can result in working for longer and delaying retirement, or living less comfortably during retirement, with less money on hand to spend.
Disclaimer
This is general information only and does not take into account your specific objectives, financial situation or needs. Seek professional financial advice, consider your own circumstances and read our Financial Services Guide, any relevant product disclosure statement & Target Market Determination, before making a decision. Call us or visit our website for a copy.
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