In Belgium the month of February is undoubtedly linked to Batibouw, the biggest exhibition of construction, renovation and home improvement. Last year, AXA Bank identified different trends in building and renovating. This year they organized more thorough research of these trends, by means of quantitative research. AXA invited research agency InSites Consulting to interview nearly 800 home owners on different aspects regarding their home.
The holy 1/3 principle is under review
The 1/3 principle determines that the monthly mortgage instalments should not exceed 1/3 of the income – a rule which was the standard in the past. These days however, this system is under review: in today’s youngest generation (aged 20-35), 43% of home owners spend more than a third of their salary on their mortgage. 20 years ago this was only 19%. Furthermore, we notice that the younger generation is dealing with larger monthly instalments; they pay about 14% more than those aged over 50.
Hot tweetaway: 43% of #homeowners spend more than 1/3 of their salary on #mortgage insit.es/2kKX8XW by @Alieke_Stubbe via @CoolBrands #mrx #AXA #InSites
Financial help by the family
Research also shows that parents increasingly help their children in acquiring a home. 60% of today’s 20-to-35-year-olds obtain financial help from their parents when purchasing their home. This was 34% for those aged 36 to 50. A mere 22% of the oldest generation in the sample, aged 50 to 65, obtained financial help when buying or building their first home.
Hot tweetaway: Parents increasingly help their children in acquiring a home insit.es/2kKX8XW by @Alieke_Stubbe via @CoolBrands #mrx #AXA #InSites #geny
It is becoming more and more difficult for youngsters to realize their dream of having their own home without any help. The purchase rates are increasing, as do the rent rates. This is why the current generation does often prefer buying to renting – renting a flat often meant paying a similar amount as mortgage instalments. This, combined with the belief that a house is an investment for the future, appears to be today’s main drivers for wanting one’s own home.
“It is striking that the Belgian Millennials all aspire to home ownership. Generally, this is a generation which attaches more importance to having means than to having a property. As for the more important decisions in life, it turns out they do go back to the traditional values (home, garden, tree) which they inherited from their Baby Boom parents.” says Joeri Van den Bergh, NxtGen Expert at InSites Consulting.