Parental support for first home buyers: the role of fairness

Australia’s housing crisis is prompting first home buyers to increasingly rely on parental support. This paper contributes new insight into the determinants and motivations of that support, and the role fairness plays through quantitative analysis of a novel national survey of Australian parents. We distinguish parents by whether they expect to help and whether that help is altruistic or comes with expectations of reciprocity, identifying which models of fairness are most influential. We examine characteristics of the children, the parents and the parent-child relationship. To enable clear comparison between siblings, we focus on two-child families, reporting on children who have yet to make a first-home purchase. Applying a fairness framework, we find strong evidence of equality within families: when one sibling is supported, the second is also likely to receive support. Parents are also influenced by perceptions of each child’s absolute wealth, indicating a desire to provide greater help where need is greater. Assistance is more likely where emotional bonds are strongest, while evidence of a traditional preference for assisting older sons with younger sisters is limited. Fairness influences not only the likelihood of support, but also whether support is altruistic, with altruistic support for one child almost always mirrored for the second. Our study shows that parents are actively involved in their children’s home ownership journeys and seek fair outcomes for their children. Thus, support for holistic financial planning across the family could help parents implement solutions consistent with their own concept of fairness. Governments could support parents who are at the margins of assistance through improved savings vehicles with tax benefits, but this must be accompanied by stricter prioritisation of direct government funding for supporting those who lack parental help.