IDEAS home Printed from https://ideas.repec.org/a/kap/reveho/v23y2025i1d10.1007_s11150-024-09732-7.html
   My bibliography  Save this article

The Bank of Mum & Dad – intergenerational transfers and first-time homeownership in Australia

Author

Listed:
  • Melek Cigdem-Bayram

    (University of Melbourne)

  • Stephen Whelan

    (University of Sydney)

  • Gavin Wood

    (RMIT University)

Abstract

Around 70 per cent of Australian households reside in owner occupied housing though ownership rates have begun to fall, especially for younger cohorts. Owner occupied housing generally represents the largest single asset in the household wealth portfolio and plays an important role in retirement planning and wealth accumulation. There is some anecdotal evidence that transfers from parents, often termed the ‘Bank of Mum and Dad’, are an increasingly important mechanism to facilitate entry into homeownership. In this paper we consider transfers in the form of bequests and inter vivos gifts from parents and examine the relationship between transfers, wealth inequality and entry into first-time homeownership. The empirical analysis indicates that bequests and inter vivos transfers hasten entry into homeownership, potentially alleviating some important liquidity constraints faced by households.

Suggested Citation

  • Melek Cigdem-Bayram & Stephen Whelan & Gavin Wood, 2025. "The Bank of Mum & Dad – intergenerational transfers and first-time homeownership in Australia," Review of Economics of the Household, Springer, vol. 23(1), pages 1-29, March.
    • Handle: RePEc:kap:reveho:v:23:y:2025:i:1:d:10.1007_s11150-024-09732-7
    DOI: 10.1007/s11150-024-09732-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11150-024-09732-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11150-024-09732-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Seymour Spilerman & Francois-Charles Wolff, 2012. "Parental wealth and resource transfers: How they matter in France for home ownership and living standards," Post-Print hal-03914532, HAL.
    2. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
    3. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    4. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    5. Engelhardt, Gary V. & Mayer, Christopher J., 1998. "Intergenerational Transfers, Borrowing Constraints, and Saving Behavior: Evidence from the Housing Market," Journal of Urban Economics, Elsevier, vol. 44(1), pages 135-157, July.
    6. Guiso, Luigi & Jappelli, Tullio, 2002. "Private Transfers, Borrowing Constraints and the Timing of Homeownership," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 315-339, May.
    7. Veli‐Matti Ritakallio, 2003. "The importance of housing costs in cross‐national comparisons of welfare (state) outcomes," International Social Security Review, John Wiley & Sons, vol. 56(2), pages 81-101, April.
    8. Deborah Cobb-Clark & Tue Gørgens, 2014. "Parents’ economic support of young-adult children: do socioeconomic circumstances matter?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 447-471, April.
    9. Heather M. Luea, 2008. "The Impact Of Financial Help And Gifts On Housing Demand And Cost Burdens," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 420-432, July.
    10. Andrew Benito, 2009. "Who Withdraws Housing Equity and Why?," Economica, London School of Economics and Political Science, vol. 76(301), pages 51-70, February.
    11. Brueckner, Jan K., 1986. "The downpayment constraint and housing tenure choice : A simplified exposition," Regional Science and Urban Economics, Elsevier, vol. 16(4), pages 519-525, November.
    12. Rory Coulter, 2018. "Parental background and housing outcomes in young adulthood," Housing Studies, Taylor & Francis Journals, vol. 33(2), pages 201-223, February.
    13. Gavin A. Wood & Rachel Ong, 2017. "The Australian Housing System: A Quiet Revolution?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(2), pages 197-204, June.
    14. Christa Hubers & Caroline Dewilde & Paul M. de Graaf, 2018. "Parental marital dissolution and the intergenerational transmission of homeownership," Housing Studies, Taylor & Francis Journals, vol. 33(2), pages 247-283, February.
    15. Artle, Roland & Varaiya, Pravin, 1978. "Life cycle consumption and homeownership," Journal of Economic Theory, Elsevier, vol. 18(1), pages 38-58, June.
    16. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    17. Rachel Ong & Gavin A Wood & Melek Cigdem, 2022. "Housing wealth, mortgages and Australians’ labour force participation in later life," Urban Studies, Urban Studies Journal Limited, vol. 59(4), pages 810-833, March.
    18. Hans G. Bloemen, 2011. "The Effect of Private Wealth on the Retirement Rate: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 78(312), pages 637-655, October.
    19. Lee, Hyojung & Myers, Dowell & Painter, Gary & Thunell, Johanna & Zissimopoulos, Julie, 2020. "The role of parental financial assistance in the transition to homeownership by young adults," Journal of Housing Economics, Elsevier, vol. 47(C).
    20. Laurie S. Goodman & Christopher Mayer, 2018. "Homeownership and the American Dream," Journal of Economic Perspectives, American Economic Association, vol. 32(1), pages 31-58, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yukutake, Norifumi & Iwata, Shinichiro & Idee, Takako, 2015. "Strategic interaction between inter vivos gifts and housing acquisition," Journal of the Japanese and International Economies, Elsevier, vol. 35(C), pages 62-77.
    2. Cindy Biesenbeek & Mauro Mastrogiacomo & Rob Alessie & Jakob de Haan, 2022. "The effect of introducing a Loan-to-Value limit on home ownership," Working Papers 741, DNB.
    3. Wold, Ella Getz & Aastveit, Knut Are & Brandsaas, Eirik & Juelsrud, Ragnar & Natvik, Gisle, 2024. "The housing channel of intergenerational wealth persistence," CEPR Discussion Papers 18888, C.E.P.R. Discussion Papers.
    4. Mauro Mastrogiacomo & Cindy Biesenbeek, 2022. "No pension and no house? The effect of LTV limits on the housing wealth accumulation of self-employed," Working Papers 746, DNB.
    5. Anastasia Girshina & Thomas Y. Mathä & Michael Ziegelmeyer, 2024. "Peer Effects in Stock Market Participation: Evidence from Immigration," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(4), pages 1060-1088, December.
    6. Lee, Hyojung & Myers, Dowell & Painter, Gary & Thunell, Johanna & Zissimopoulos, Julie, 2020. "The role of parental financial assistance in the transition to homeownership by young adults," Journal of Housing Economics, Elsevier, vol. 47(C).
    7. Bolliger, Elio & Bruhin, Adrian & Fuster, Andreas & Ganarin, Maja, 2025. "The effect of macroprudential policies on homeownership: Evidence from Switzerland," Journal of Urban Economics, Elsevier, vol. 146(C).
    8. Guiso, Luigi & Jappelli, Tullio, 2002. "Private Transfers, Borrowing Constraints and the Timing of Homeownership," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(2), pages 315-339, May.
    9. Donald Cox & Oded Stark, 2007. "On the Demand for Grandchildren: Tied Transfers and the Demonstration Effect," Chapters, in: Luigino Bruni & Pier Luigi Porta (ed.), Handbook on the Economics of Happiness, chapter 18, Edward Elgar Publishing.
    10. Benetton, Matteo & Kudlyak, Marianna & ,, 2022. "Dynastic Home Equity," CEPR Discussion Papers 17464, C.E.P.R. Discussion Papers.
    11. Chiuri, Maria Concetta & Jappelli, Tullio, 2003. "Financial market imperfections and home ownership: A comparative study," European Economic Review, Elsevier, vol. 47(5), pages 857-875, October.
    12. Jason Allen & Kyra Carmichael & Robert Clark & Shaoteng Li & Nicolas Vincent, 2024. "Housing Affordability and Parental Income Support," Staff Working Papers 24-28, Bank of Canada.
    13. Peter Lindner & Thomas Y. Mathä & Giuseppe Pulina & Michael Ziegelmeyer, 2023. "Borrowing constraints, own labour and homeownership," Applied Economics, Taylor & Francis Journals, vol. 55(42), pages 4931-4945, September.
    14. Bee Boileau & David Sturrock, 2023. "What drives the timing of inter-vivos transfers?," IFS Working Papers W23/09, Institute for Fiscal Studies.
    15. Carole Bonnet & Bertrand Garbinti & Sébastien Grobon, 2018. "Rising inequalities in access to home ownership among young households in France, 1973-2013," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 500-501-5, pages 117-138.
    16. Shaun A. Bond & Michael D. Eriksen, 2021. "The role of parents on the home ownership experience of their children: Evidence from the health and retirement study," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(2), pages 433-458, June.
    17. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
    18. Wouter van Gent & Rik Damhuis & Sako Musterd, 2023. "Gentrifying with family wealth: Parental gifts and neighbourhood sorting among young adult owner-occupants," Urban Studies, Urban Studies Journal Limited, vol. 60(16), pages 3312-3335, December.
    19. Cody Hochstenbach, 2018. "Spatializing the intergenerational transmission of inequalities: Parental wealth, residential segregation, and urban inequality," Environment and Planning A, , vol. 50(3), pages 689-708, May.
    20. Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2007. "Income Transfers, Welfare and Family Decisions," IZA Discussion Papers 2804, Institute of Labor Economics (IZA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:reveho:v:23:y:2025:i:1:d:10.1007_s11150-024-09732-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.