Home ownership a life goal for most Hong Kong students, with ‘Bank of Mum and Dad’ expected to pay for it, survey finds
Sun Life survey finds students expect parental help buying a home in the world’s most expensive property market
Most young people in Hong Kong look at buying a property as a life goal, and about half consider their parents duty-bound to help them achieve that dream, according to a survey by the insurer Sun Life.
Getting onto the city’s notoriously expensive property ladder was top of the wish list for 59 per cent of students surveyed by the local branch of the Canadian insurance giant. And 49 per cent of the respondents expected the “Bank of Mum and Dad” to give them a financial leg-up.
However, some of them may have to really turn on the persuasive charm to win their parents over; only 41 per cent of mothers and fathers surveyed said they had actually started saving money to help their children buy property.
The financial demands on parents don’t end with home ownership. It turns out they are expected to fund their offspring’s global travel ambitions too, with more than half saying their parents should help them achieve this dream as well.
And it’s never too early for their parents’ generosity to begin, according to the young respondents.
More than half of them (55 per cent) said parents should start saving before their children are even born, so as to help them “win at the starting line”. Only 46 per cent of parents agreed.
Sun Life Hong Kong surveyed 690 parents and 141 students in the city between April and May this year, with the focus on their financial expectations and any differences between the two generations.
Parents and their children believe it requires at least HK$4 million (US$510,000) to raise a child, the study revealed.
The good news for young people relying on parental support to get on the housing ladder is that an earlier survey by AIA found that 70 per cent of parents plan to help them.
The findings of both surveys underline how the “Bank of Mum and Dad” has become a major source of funds for young first-time buyers in the world’s most expensive property market.
The trend prompted Hong Kong Monetary Authority chief executive Norman Chan Tak-lam to warn that it was “very irrational” to enter the market based on expectations that home prices would never go down.
The Sun Life survey found that about one in six respondents aged 34 or below have already saved an average of HK$558,844 (US$71,230) to prepare for their children’s future, while parents aged 45 or above have set aside HK$893,506.
However, that amount won’t go very far in a city where home prices have climbed consistently for more than two years to the point where there are few properties still valued below HK$4 million.
The study showed that sometimes the gap in expectations goes the other way. Sixty-four per cent of the older respondents said they had saved up money for their children’s education, while only half of the students felt their parents would be able to finance further studies.
About a third of young people and 43 per cent of parents believe the latter should continue to pay for education after graduation from university.
On average, the students believe their parents should pay them HK$6,157 a month after they complete their studies, which is close to the view of younger parents, aged 34 or below, who plan to pay an average of HK$6,455 a month for their grown-up children. Parents aged over 45, however, were only prepared to provide monthly support of HK$3,927.
“The gap here reflects the fact student respondents have a higher expectation of the resources their parents should devote to them,” said Belinda Au, general manager of distribution and marketing at Sun Life Hong Kong. “It is always better to start saving as early as possible.”
There may be disappointment ahead for young Hongkongers dreaming of far-flung adventure. The survey found 55 per cent of them believe their parents have the means to support their travel plans, while 71 per cent of the parents said they had no plans to save money for this cause.