Czech parents spend savings on housing for their children: poll

Nearly nine in ten Czech parents believe young people cannot afford to buy their own home without family help. That is the finding of a September Ipsos survey for Broker Consulting, which questioned 611 parents of children aged 18 to 40.

Some 32% of respondents have already arranged housing help, and another 35% expect they will have to. According to Michal Straka of Ipsos, parents show “exceptionally strong unanimity”: owning a home is becoming less and less attainable for the younger generation.

Help that costs money

Parents don't just give money towards an apartment or house. They “put to work” the family's property: they transfer part or all of it to their children, or pledge their own home as security for a child's mortgage. Sometimes it is the house where the parents live themselves, sometimes a cottage or an investment flat.

Four in five respondents called such help a financial sacrifice: it often dips into savings set aside for retirement. Even so, nine in ten of those who have already helped their children would do the same again.

Martin Novák, chief analyst at Broker Consulting, also pointed to a new trend: some parents build a substantial contribution to their children's housing into their financial plans from the day the child is born. In that case there are almost no negative emotions or surprises.

When to hand over property

Michal Skořepa, an analyst at Česká spořitelna, believes that putting off the transfer of property until inheritance is “tragically late”: with today's life expectancy, an heir will receive property at 50 or later.

Two thirds of respondents are convinced it was easier for their generation to buy a home, and only 4% think things are easier for today's young people.

The risk of inequality and lower spending

Economist Mojmír Hampl, chairman of the National Budget Council, expects growing wealth inequality between young people who can be helped by the older generation and everyone else. In his words, a whole generation could emerge whose only experience is renting.

Jiří Rusnok, a former prime minister and central bank governor who is now an adviser to the Allianz board, warns that pressure to transfer property within families increases the burden on households that already have higher-than-average European housing costs, above all for energy. “People will have less left for current consumption, and that is a key part of the economy's engine,” he said.

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Source: denik.cz