1 00:00:01,600 --> 00:00:04,280 Speaker 1: So we've got new research from Kiwibank which shows that 2 00:00:04,360 --> 00:00:06,040 Speaker 1: the third of us have used the bank of mum 3 00:00:06,040 --> 00:00:08,119 Speaker 1: and Dad to get into our first home. And as 4 00:00:08,160 --> 00:00:11,600 Speaker 1: you'd expect, the numbers even higher for younger people. Sixty 5 00:00:11,680 --> 00:00:15,600 Speaker 1: five percent of gen Z homeowners had some sort of 6 00:00:15,640 --> 00:00:19,160 Speaker 1: financial help from their parents when they bought their first property. 7 00:00:19,520 --> 00:00:22,560 Speaker 1: So Leslie Harris as a director of the First home 8 00:00:22,600 --> 00:00:24,000 Speaker 1: Buyers Club and she joins me, now. 9 00:00:24,000 --> 00:00:26,480 Speaker 2: Hella, Leslie, good afternoon, Andrew. 10 00:00:26,760 --> 00:00:28,920 Speaker 1: This doesn't shock me. But what does shock me is 11 00:00:28,960 --> 00:00:31,280 Speaker 1: just how many kids are dependent on the parents. 12 00:00:31,960 --> 00:00:34,080 Speaker 2: Well, it doesn't shock us at all. It's kind of 13 00:00:34,120 --> 00:00:36,599 Speaker 2: what we know. I mean, we saw some research that 14 00:00:36,680 --> 00:00:39,120 Speaker 2: came out all a couple of years ago that talked 15 00:00:39,120 --> 00:00:41,879 Speaker 2: about bank of Mum and Dad is actually our biggest 16 00:00:41,880 --> 00:00:45,040 Speaker 2: bank here in New Zealand. So we know that a 17 00:00:45,080 --> 00:00:48,080 Speaker 2: lot of people, you know, especially the young ones, are 18 00:00:48,120 --> 00:00:51,919 Speaker 2: relying on that contribution. But you know, we've also got 19 00:00:51,960 --> 00:00:53,800 Speaker 2: to go, well, aren't you lucky if you've got a 20 00:00:53,840 --> 00:00:56,200 Speaker 2: mum bank of mum and Dad. I mean not everybody 21 00:00:56,280 --> 00:00:57,680 Speaker 2: has that exactly. 22 00:00:57,760 --> 00:00:59,680 Speaker 1: Yes, Well there's that old thing that rich get richer 23 00:00:59,680 --> 00:01:00,800 Speaker 1: and the poor get poorer and. 24 00:01:00,720 --> 00:01:02,520 Speaker 2: For the real it's generational one. 25 00:01:02,480 --> 00:01:05,840 Speaker 1: Generation, which it is. Yeah, Okay, is it happening more 26 00:01:05,920 --> 00:01:08,240 Speaker 1: now than in the past, has it? Has it been 27 00:01:08,280 --> 00:01:11,440 Speaker 1: exponentially rising over the last while, or has this been 28 00:01:11,440 --> 00:01:13,039 Speaker 1: happening for twenty thirty years. 29 00:01:13,440 --> 00:01:16,480 Speaker 2: I don't believe it's been happening as as not nearly 30 00:01:16,520 --> 00:01:19,240 Speaker 2: as much as what we're seeing now. But we're seeing 31 00:01:19,280 --> 00:01:24,960 Speaker 2: such a massive disparity now between people's incomes and ability 32 00:01:25,040 --> 00:01:28,120 Speaker 2: to purchase a home, which is completely different to what 33 00:01:28,160 --> 00:01:32,080 Speaker 2: it was twenty or thirty years ago. It's really only 34 00:01:32,160 --> 00:01:36,600 Speaker 2: those very top income earners that we're seeing actually able 35 00:01:36,640 --> 00:01:39,320 Speaker 2: to actually get those mortgages and get into those homes. 36 00:01:39,800 --> 00:01:41,800 Speaker 1: So is this a warning for anyone who's planning to 37 00:01:41,840 --> 00:01:44,200 Speaker 1: have kids or has just had kids that really you're 38 00:01:44,240 --> 00:01:46,800 Speaker 1: going to have to start thinking about making sure that 39 00:01:46,840 --> 00:01:49,440 Speaker 1: you're tithing off a certain part of your income to 40 00:01:49,480 --> 00:01:51,280 Speaker 1: help your kids, because it's going to be necessary. 41 00:01:52,280 --> 00:01:54,880 Speaker 2: I think one of the things that I've talked about 42 00:01:54,880 --> 00:01:57,720 Speaker 2: a little bit before is that, you know, as a country, 43 00:01:57,760 --> 00:02:01,920 Speaker 2: really thinking about the impact on people's retirements. I mean, 44 00:02:01,920 --> 00:02:04,920 Speaker 2: if I look at myself, you know, three children, if 45 00:02:04,960 --> 00:02:07,760 Speaker 2: I've got to help all of those into their first homes. 46 00:02:07,840 --> 00:02:11,240 Speaker 2: Then really, my retirement's going to look actually quite different. 47 00:02:11,360 --> 00:02:13,720 Speaker 2: So this is a real New Zealand problem. It's not 48 00:02:13,960 --> 00:02:16,480 Speaker 2: just for the young ones getting into their homes. It 49 00:02:16,520 --> 00:02:20,280 Speaker 2: actually is going to impact our generation going into retirement 50 00:02:20,320 --> 00:02:22,320 Speaker 2: with what they've actually got to retire on. 51 00:02:24,000 --> 00:02:28,040 Speaker 1: Do you have any facts and figures about how these 52 00:02:28,680 --> 00:02:30,960 Speaker 1: loans or gifts are structured? In fact, I'm going to 53 00:02:31,080 --> 00:02:34,400 Speaker 1: ask a different question, are these loans or are these gifts? 54 00:02:35,840 --> 00:02:40,240 Speaker 2: Typically what we're actually seeing is gifts, because really if 55 00:02:40,280 --> 00:02:43,560 Speaker 2: they're loans, then it's not going to make that much 56 00:02:43,639 --> 00:02:46,200 Speaker 2: difference to the bank because it's still going to have 57 00:02:46,280 --> 00:02:48,680 Speaker 2: to be something that needs to be paid back. I mean, 58 00:02:48,760 --> 00:02:51,800 Speaker 2: one thing that the Keywi Bank report did touch on 59 00:02:52,040 --> 00:02:56,960 Speaker 2: is the importance of really having clarity amongst all parties 60 00:02:57,080 --> 00:02:59,359 Speaker 2: about is it a gift or is it a loan? 61 00:02:59,400 --> 00:03:01,839 Speaker 2: Because if it's and it's got to be factored into 62 00:03:01,880 --> 00:03:03,800 Speaker 2: the repayments and their affordability. 63 00:03:04,840 --> 00:03:07,640 Speaker 1: Yes, but some people just don't believe in disclosure. 64 00:03:10,040 --> 00:03:12,840 Speaker 2: Yeah, well, I mean that's but then you know, potential 65 00:03:13,160 --> 00:03:16,520 Speaker 2: impacts on families falling out if all of a sudden 66 00:03:16,560 --> 00:03:19,120 Speaker 2: they've got to start repaying something and they weren't clear 67 00:03:19,160 --> 00:03:21,640 Speaker 2: on that that's going to cause some issues. 68 00:03:21,720 --> 00:03:24,640 Speaker 1: So do you have any sort of anecdotal stuff or 69 00:03:24,680 --> 00:03:28,880 Speaker 1: any empirical evidence about the contracts that might exist between 70 00:03:28,919 --> 00:03:33,360 Speaker 1: parents and children to ensure that the parents' money, that 71 00:03:33,440 --> 00:03:34,840 Speaker 1: their assets are not wasted. 72 00:03:35,800 --> 00:03:37,840 Speaker 2: So one of the things that you know, I've spoken 73 00:03:37,840 --> 00:03:40,840 Speaker 2: about a little bit is anything like this. You know, 74 00:03:40,920 --> 00:03:43,560 Speaker 2: it's full disclosure, and you need to get the right 75 00:03:43,720 --> 00:03:46,880 Speaker 2: legal advice because there's a lot of implications. For example, 76 00:03:47,240 --> 00:03:49,720 Speaker 2: if I was to give to my son and then 77 00:03:49,880 --> 00:03:53,040 Speaker 2: he was married and then divorced, I wouldn't really want 78 00:03:53,080 --> 00:03:57,520 Speaker 2: that gift being split two ways. So things need to 79 00:03:57,560 --> 00:04:00,400 Speaker 2: be structured in a way so that the intention of 80 00:04:00,440 --> 00:04:04,040 Speaker 2: that gift is actually you know, preserved for the purposes 81 00:04:04,080 --> 00:04:06,080 Speaker 2: that it was initially intended. For. 82 00:04:06,640 --> 00:04:09,360 Speaker 1: Our lawyers up to speed with this, and therefore they 83 00:04:09,400 --> 00:04:11,800 Speaker 1: have the forms, they have you know, the templates, so 84 00:04:11,840 --> 00:04:14,320 Speaker 1: that they can put in an agreement that will protect 85 00:04:14,600 --> 00:04:16,680 Speaker 1: the parents' money. Because're quite right that whole you know, 86 00:04:16,920 --> 00:04:19,520 Speaker 1: after the de facto, after the two years, a bit 87 00:04:19,560 --> 00:04:20,839 Speaker 1: of a split, half the money goes. 88 00:04:20,880 --> 00:04:24,440 Speaker 2: You know, well, I think you know some very clear, 89 00:04:24,600 --> 00:04:28,320 Speaker 2: strong advice that we've seen being given that some sort 90 00:04:28,360 --> 00:04:32,360 Speaker 2: of prenup or something, you know, before entering into that 91 00:04:32,440 --> 00:04:34,880 Speaker 2: de facto relationship, if there was going to be a 92 00:04:34,960 --> 00:04:38,279 Speaker 2: significant gift for the house, so that it just all 93 00:04:38,320 --> 00:04:40,799 Speaker 2: needs to be thought about. It all needs to be discussed, 94 00:04:40,839 --> 00:04:45,040 Speaker 2: and we recommend getting proper legal advice from the experts 95 00:04:45,120 --> 00:04:46,400 Speaker 2: that know the stuff. 96 00:04:46,320 --> 00:04:48,119 Speaker 1: Good stuff, and I thank you so much. Lesie Harris 97 00:04:48,160 --> 00:04:49,919 Speaker 1: is from the First Home Buyers Club, who knew that 98 00:04:49,920 --> 00:04:50,960 Speaker 1: there was a thing like that. 99 00:04:51,760 --> 00:04:54,920 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 100 00:04:55,040 --> 00:04:55,559 Speaker 2: news talks. 101 00:04:55,560 --> 00:04:58,760 Speaker 1: It'd be from four pm weekdays, or follow the podcast 102 00:04:58,839 --> 00:04:59,840 Speaker 1: on iHeartRadio.