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Sydney Parents Buy Property for Daughter’s Future
A couple from Sydney has made headlines by purchasing a one-bedroom apartment worth $1 million for their four-year-old daughter instead of waiting to leave her an inheritance later on. Mark and Alana, both employed in the sales sector of cybersecurity, aim to provide their daughter, named Willoughby after the lower North Shore suburb, with a financial safety net.
Mark describes their decision as a type of "insurance policy" for their daughter’s future. He believes that their proactive approach, rather than leaving her an inheritance when the time comes, offers a far more useful advantage. “I wanted … so that no matter what happens to me, there will be something for my daughter one day,” Mark explained to Yahoo Finance. By investing in property now, they intend to secure an asset that could appreciate and provide financial support for Willoughby in the future.
The Significance of Timing and Market Conditions
The apartment is located in a new development called Willoughby Grounds, expected to be completed by August. Having previously lived in Willoughby, the couple felt that this acquisition was serendipitous. With property prices skyrocketing in recent years, experts note a growing trend of parents stepping in to assist their children in entering the property market. Research by Mozo indicates that parents are gifting substantial sums—averaging around $74,040—to help with home deposits, with many expecting no repayment.
Additionally, a study by Australian Seniors found that 70% of parents over the age of 50 plan to provide early inheritances for their children to help them advance economically.
Ray White Lower North Shore director Tim Abbott stated that while it is still uncommon for parents to buy properties outright for young children, many are helping with deposits to give their kids a leg up in the surging market. He remarked, “If they can secure something [now], it’s going to pay off for them financially over the long term.”
Financial Commitments and Future Plans
Mark and Alana plan to rent out the apartment until their daughter is older, anticipating a weekly rental income of approximately $850. This strategy allows flexibility for Willoughby in the future—she can choose to live in the apartment, sell it, or use the funds to finance her university education or even her first home deposit.
While Mark acknowledges that they are fortunate to afford such a property, he stresses that it hasn’t been an easy journey. The couple will need to find an additional $2,500 monthly to manage the mortgage payments and rental costs. However, Mark insists that making this financial sacrifice now is easier than doing so in 16 years when Willoughby is older and they may have fewer opportunities to generate extra income.
Parental Perspectives on Inheritance
Mark’s own childhood experience informs his views on inheritance. He recalls growing up without significant financial support and prefers to provide his daughter with immediate assistance rather than waiting until a future event unfolds. He argues that waiting for an inheritance may not effectively serve the needs of the younger generation when the time comes. “Let’s say I live until 80. What will my daughter want to do with money when she’s already made her own life?” he questioned.
Conclusion
While Mark and Alana’s decision may stand out as a unique example, it reflects a broader shift among Australian parents who are increasingly investing in their children’s futures through real estate. As property prices continue to rise, this trend is likely to persist, providing a significant advantage to the next generation. For now, their daughter might not fully grasp the magnitude of this decision, but as she grows older, she’ll undoubtedly appreciate the foresight and love shown by her parents.
