Parental financial support for housing: the importance of investment homes and family size

Abstract

Purpose Homeownership for younger generations is exacerbated by the deterioration in affordability worldwide. As a result, the role of parental support in facilitating homeownership requires attention. This study aims to assess the influence of parental wealth and housing tenure as support mechanisms to facilitate homeownership for their children. Design/methodology/approach This study uses data from a representative survey of the New Zealand population. Findings Parents who are homeowners tend to offer more financial support to their children than those who rent. Additionally, the financial support increases when parents have investment housing as well. The results further reveal differences in financial support when considering one-child and multi-child families. The intergenerational transmission of wealth inequality appears to be more noticeable in multi-child families, where parental housing tenure plays a dominant role in determining the level of financial support provided to offspring. Originality/value The insights gained serve as a basis for refining housing policies to better account for these family transfers and promote equitable access to homeownership.