About five or six decades ago, the life plan for most Australians was pretty simple…meet the partner of your dreams, get married, buy your first home and baby one, two and three would follow… all by the age of 30.

But times have changed, and what was once the ‘norm’ is today very far from reality for many Australian families or single parents with children.

So what’s changed?

In 1975, Australia’s population was just 13.9 million - today it’s sitting at over 24 million. Fewer people are getting married, and if they do marry, they’re a lot older. In 1975, the average groom was aged 23.8, while brides were 21. Compared to 29.9 and 28.3 respectively, in 2015.

As a result of young Australians settling down later -women are having babies later. Birth data from the Australian Institute of Health and Welfare shows that more than one in five women who are giving birth in Australia are now aged 35 or over, and first-time mothers now have an average age of 28.6 years.

This is compared to 1963, when most commonly, women gave birth to their first child aged in their early twenties.

So, why are families having babies later? There are a number of reasons. Many women are opting to engage in further studies after they leave school and establish their careers, before having families. Australians are also travelling more, with figures showing 7.8 million residents travelled abroad in 2011, from only 3.5 million residents travelling abroad in 2002.

We are buying homes later

There has also been a significant increase in the age of first home buyers.

Figures show that the average age of first home ownership jumped dramatically in the decade from 2005, from 34.7 to 37.7. This compares to 25 in the 1970s.

Data from HomeStart Finance shows that between 2011-2015 the number of over 40s first home buyers increased by more than 50%.

In the same period, the number of first home buyers between 18-29 decreased by more than 50%, and those aged between 30-39 decreased by 20%. If this trend continues, it’s predicted that over 40s will make up the majority of Australian first-time buyers in the next decade.

So why are Australians buying homes later? Soaring house prices is one of the core reasons, preventing a growing number of young buyers from entering the market. Fiscal concessions such as negative gearing and concessionary capital gains tax for "mum and dad" investors have allowed the Baby Boomers to pay more for properties than Gen Y can afford, allowing them to accumulate properties.

The cost of living has also increased – including rental prices, making it more difficult to save the upfront costs, like the deposit, required to buy a home.

There’s also no question that Gen Y are more focussed on life experiences than previous generations, such as those gathered through travel. This has impacted on their ability to save for a home deposit at a young age.

Get into your own home sooner

What should come first – baby or home?

Buying a home and having children remain important life milestones for most Australians.

But with Australians having babies and buying homes in their early to mid 30s, many are faced with the scenario of looking to break into the housing market and have their first baby at the same time.

Deciding what to do first is complicated. The decision not only revolves around your financial position, but where you are in life, your wishes and vision for the future.

While there’s no right or wrong choice, it is important to recognise that having children impacts on your borrowing ability and financial capacity.

In terms of how much you can borrow, this will vary from lender to lender. However, living expenses are assessed higher the more children you have under 18.

The table below shows how much a household with a total income of $75,000 a year can borrow with HomeStart Finance.
Couple, no children $507,680
Couple, two children $457,520
Couple, three children $432,440
Single, no children $475,060
Single, two children $430,980

While it’s a very basic example, the figures show that each child decreases your borrowing power on average by $25,000, if you’re in a couple, and about $22,000 if you’re a single.

On top of the impact on your borrowing capacity, having children creates other financial demands.

Findings from University of Canberra show that for a typical middle-class Australian family, the cost of raising two children from birth to adulthood is $812,000.

These are important considerations when you start down the road of planning your life and family.

Personal experiences

Home first

Shauna, and her husband, bought their home in December 2011, prior to welcoming their first son in May 2015 and daughter in early 2017.

Reflecting on the decision to buy a home before having their children, Shauna said it has brought financial stability to their family.

“My husband and I had been together for a while and the next step was to buy a home together. At this stage, having kids wasn’t in our short-term thoughts - but we always knew in the future we would have kids,” she said.

“When we were saving for our deposit, we were both working full-time meaning we had two incomes to put towards the upfront costs of buying a home.

“Whereas after having children I have worked part-time. If we were trying to save for a deposit now, while paying rent, it would be near impossible to save the deposit required.

“We can comfortably pay off the mortgage – but saving a whole lot of money, such as a deposit, isn’t possible.

“By having our own home, I definitely feel more financially secure and that we’re in a stronger financial position.

“There are other benefits, including the security of knowing that you’re not going to need to look for another rental if the landlord ends your lease.

“It’s nice to feel that we’re anchored at our home - that it’s our family home.”

Baby first

Mary and her husband, have a one-year-old daughter, and live in the home they have rented for the past five years.

“The home we rent is a short commute to both our offices and close to our friends, family and parents,” Mary said.

“At the moment we aren’t able to afford a home in this area and if we were to buy a home, we would be - at the closest - 40 minutes away from our work, friends and family.

“Adding time onto our commute and moving away from our support network was the exact opposite to what we want after having a newborn.”

Mary said at the moment the family is happy renting and continue to put money towards their home deposit.

“Some of my friends have also chosen to have kids before buying a home.

“One of my girlfriends was in her late 30s when she had her first baby. Her and her husband felt that if they bought a home, which could have taken more than a year, and then had a child, the chances of her falling pregnant while getting closer to 40 would have decreased.

“Ultimately, the decision is very individual to each couple. Whether you have a baby or buy your home first – the priority is that your child is healthy and happy.”

How to make it easier

As was seen in calculations, HomeStart Finance, allows couples and singles a larger borrowing capacity than other mainstream lenders.

Saving for a deposit is regarded as the biggest challenge for first home buyers, however, HomeStart offers low deposit loans, where you can get into a home with as little as 3% deposit.

This considerably decreases your upfront costs when buying a home – making it easier if you’re a single parent or in a couple, where one parent works part-time after the birth of your children.

On top of this, HomeStart’s Breakthrough Loan which is a shared equity product and allows you to borrow up to 30% more.