New figures out this month have shown that property still dominates private wealth in Australia. The figures, from Rismark RP-Data, estimate that a massive $3.6 trillion of Australia’s wealth is in the property market.
Within the Greek culture, property ownership represents affluence, and a sense of having ‘made it’ in Australia. While it was a buyers market for first generation Greeks who worked hard to enter the property market and eventually were able to buy investment properties, for their children today it’s a different story.
Young Greek Australians are finding it harder and harder to enter the property market for a number of reasons. Whether it’s a case of property prices being too high, their wages not being representative of what they can afford, the first home owners grant not being available or them not being eligible for a home loan, the younger generation are having to think laterally to be able to start a property portfolio.
Debbie Mantzaris stayed at home until she was 35-years-old and with the help of her family got her deposit for her first home. Due to her career choice, Mantzaris had to remain at university for ten years so she joined the workforce later in life. “Without my parents’ help I don’t think I would have been a homeowner so early in life,” she says matter-of-factly.
Kon Lazogas, sales director and auctioneer, Lazogas Real Estate, says that a number of Greek Australian people are “buying something to make a start”.
“They will continue to live at mum and dad’s house and hopefully there would be some growth in that property so in a year or two years time they can flip it and purchase something that is more to their taste,” he explains Without help from their family, and without the support of their parents, many of these first home owners wouldn’t get off the ground.
Athos Christou, head of business banking, Beirut Hellenic Bank tells Neos Kosmos that “a large number of borrowers need the assistance of their parents when buying their first home”. “Parents would use the equity in their home to assist their children with their house deposit. There are NCCP implications but it is possible.” Lazogas has noticed various ways in which parents provide financial support for their children.
“Sometimes they sign the investment property over to the kids so they can get an identity within the home lending arena or borrow against their own property. I have also seen a number of house sales where the parents will sell a property that they bought for $30,000 to distribute the money amongst their kids so they can buy property,” he tells Neos Kosmos.
And it’s not just being there to provide money for the house deposit; family support comes in all forms. Lazogas said it’s a cultural thing with Greeks when it comes to property and they always have one thing in mind – creating growth and saving money. “The family want to get involved [with the purchase of the property], work together and help each other,” says Lazogas on Greek property purchasing culture in Australia.
For Mantzaris, her time in the property market has been closely connected to her family. She was ineligible for the first home owners grant because her father had put her as part owner in an investment property. Her and her brother own the house next door and plan to knock down the two houses and build townhouses. After all, her father is a builder. But for those who don’t have the financial support of their family, they tend to fall off the property wagon. In most cases, they’ve had to rely on financial lenders to get the deposit for their house. But for some, the great Australian dream is unattainable.
A way their family can provide support is to allow them to stay at home until their financial situation changes so they can save for that property. But for those who no longer want to live at home, and who can’t afford to buy, renting is their only option.
Joanne Mananis has been a renter for over ten years and says that this is a better alternative for her. A previous homeowner, Mananis likes the freedom that comes with rental properties.
“There is no hassle in renting,” explains Mananis. “I found owning a house, while it has its positives – as in you can do whatever you want to it – there are a lot of fees associated with it. It’s a big responsibly; a big commitment financially.”
However, Lazogas feels it is more common for Greeks to stay at home and live with their parents than rent. He says that his office, which is in the prominent Greek area of Oakleigh, Victoria, doesn’t have a huge database of Greek tenants.
“This confirms the cultural trend that there is a subconscious understanding that your parents would be disappointed if you decided to rent because they don’t like the fact that you are paying someone else’s mortgage,” says Lazogas.
Mananis says another reason she rents is because the property prices in Melbourne are too expensive to get a decent property in a nice suburb and that you would need to move to the outer suburbs or move to another city to buy a nice house. “House affordability is a real issue for first home buyers,” adds Christou.
As the head of business banking at Beirut Hellenic Bank, Christou says “the days of easy credit are in the past”. “The borrower needs to have permanent employment with consistent employment history, demonstrate a good savings record and have clear credit history,” to be considered for a personal home loan.
The average price for a house in New South Wales is $500,000, that’s up 0.5 per cent from last year, according to RP-Data, with Melbourne close behind on $475,000.
“Something that stands out across the board in Melbourne, and most of Australia, are the insane entry level prices to get into the property market. The prices have gone through the roof,” says Lazogas. But he adds that first home buyers should stay positive as he feels there has been a realignment with property pricing and it could be a buyers market yet again.