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Despite 13 rate rises in the past year and a half, including last Tuesday’s hike of 25 basis points to 4.35 per cent, the Sydney property market remains surprisingly buoyant. Great for some, perhaps, but for those trying to take those first tentative steps towards homeownership, it means the goal may be increasingly unobtainable.
The median house price in Sydney is $1,578,099. The normal deposit is 10 per cent so to get the key to the door means a down payment of $160,000, assuming you have convinced the lender you can meet the repayments.
As the Herald reported last month, the bank of mum and dad is notoriously hard to measure, but visible on auction floors every weekend as many buyers walk away with the keys thanks to family backing. Many receive large sums to help with purchases while elsewhere entire homes are paid for.
About 40 per cent of those aged 25 to 34 are considering turning to the bank of mum and dad to help buy a home, according to a recent report by the Australian Housing and Urban Research Institute. Lawyers have warned that parents considering providing help need to be very clear on whether they are providing a gift or a loan to their children. Couple that with the fact that people are living longer, and you have all the ingredients within the family for what is known as “inheritance impatience”.
The upshot is, as Mary Ward reports today, state social services dealing with a rising number of cases of elder abuse. The NSW Ageing and Disability Commission’s abuse helpline received 14,025 calls in 2022-23, a 12 per cent increase from the previous year, its annual report shows.
She reports that of the more than 5000 allegations about abuse of older people made to the commission, the highest number relate to psychological abuse (41.7 per cent). However, the commission also received more than 1400 complaints of pure financial abuse, including exploitation, misused power of attorney and theft.
NSW Ageing and Disability Commissioner Robert Fitzgerald says the trend is attributable to a rising number of people reaching the age of 75, an increase in older people left vulnerable due to poverty, and also the emerging phenomenon of “inheritance impatience”. “What we know about adult children is that they are not patient, so inheritance impatience will, in fact, grow,” he says.
Craig Hollett, a director of Solomon Hollett Lawyers in Perth advises on loans and gifts within families. On the company’s website he writes: “In some of these cases, our discussions have led us to consider that a form of elder abuse may have occurred, where parents have been taken advantage of or felt morally unable to refuse their children or were simply forced to sign documents. This is a growing epidemic in our current society where children want their inheritance before their parents have died and are not prepared to wait. This just leaves the situation ripe for family disputes and fractured families.”
Fitzgerald has been lobbying for more funding for tackling elder abuse since starting the newly created role in 2019. The NSW Ageing and Disability Commission is currently being funded by a $2.5 million one-off payment. Other states are singing from the same hymn sheet in calling for greater funding of elderly support services.
Nick Tebbey, national executive officer of Relationships Australia, spells it out. “We are about to see a huge intergenerational transfer of wealth in this country and inheritance is a source of conflict,” he said.
It seems reasonable to assume property prices aren’t about to dip and that life expectancy is likely to edge higher with advances in medicine. The problem isn’t going away.
Historically as other areas of abuse have been identified, such as domestic and sexual abuse, funding has been obtained to tackle them. Abuse directed at the elderly is unacceptable. We agree that the level to which support services are funded needs to be revisited, and appropriate funds made promptly available.
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