‘It’s all our fault’: Cost of living forces families to move in with seniors
- Replies 10
In an era of skyrocketing living costs, families face a financial crunch. For some, the solution has been to return to their roots, quite literally.
More and more families are moving back in with their parents or grandparents, creating multi-generational households.
While not new, this trend is gaining momentum as families grapple with the economic fallout of the COVID-19 pandemic and the rising cost of living.
Take the case of Pamela (name changed for privacy), a 42-year-old mum of two. She never imagined she would return to her childhood home, let alone with her husband and children in tow.
She had left home at 20, bought her own apartment at 27, and comfortably paid her mortgage for 14 years.
However, the pandemic's travel restrictions decimated her 15-year-old business, leaving her with a debt of around $6000.
‘It was very strange lying in the bed, going to sleep with my husband, knowing my parents were in the other bedroom, my boys were in another room. And I was in my brother's old bedroom,’ Pamela said.
‘There's been lots of tears, put it that way.’
Despite Pamela and her husband working multiple jobs, they couldn't keep up with their expenses.
Their combined income of around $70,000 was insufficient to cover their debt and their $340,000 mortgage, which had risen to about $2600 a month due to multiple rate hikes.
The financial stress was so severe that Pamela's parents suggested she move back in with them.
‘We were behind on strata bills, we were behind on council rates because we just didn't have the income to cover it,’ she said.
Moving back home, however, was not without its challenges.
Pamela grappled with feelings of guilt and shame, particularly as her parents, who were enjoying their retirement, had to adjust to the noise and energy of her two young boys.
Her mum was a cancer survivor and had retired, so she was previously enjoying a quiet life and not having to work.
‘The number of times I've cried because I've put my parents in this situation, and when they start to argue and then I go “it's all our fault”. It's awful,’ she explained.
'You are meant to be a grown adult, and they [her parents] are meant to be living their life, and you've turned everything upside down.’
‘And then we come with two very energetic, loud boys. So, I think everyone's had to adjust. I've lived on my own since I was 20, I'm now 43, so it is an adjustment.’
Pamela's husband helped with gardening and maintenance, and her parents babysat the children, allowing Pamela and her husband to work more hours.
The children also benefited from the arrangement, forming a close bond with their grandparents and enjoying the space to play sports, which they didn't have in their apartment.
Pamela's story is not unique. The rising cost of living drives more families to adopt multi-generational living arrangements.
According to Dr Michael Fotheringham, Managing Director of the Australian Housing and Urban Research Institute (AHURI), multi-generational living was already popular among some cultural groups in Australia.
However, the ‘cost of living, and in particular the cost of housing, are real drivers of this trend’.
‘It is definitely a growing trend for adult children with kids of their own to move back in with their parents, or in fact, not move out in the first place and have three generations living in a household by choice, for a range of reasons,’ Fortheringham said.
Data from the Australian Bureau of Statistics showed a 22 per cent increase in three-generational living arrangements over five years, from 275,000 in 2016 to 335,000 in 2021.
Home builders have also noted the trend, with many promoting homes designed for multi-generational families.
Compare the Market’s Economic Director and former Sunrise host David Koch described the housing situation as a ‘tough pill’ for young Aussies who have not had time to save up.
For him, ouse prices had gone way up compared to what people earn, and this was happening faster than wages were growing.
Chris Thornton, the Chief Operating Officer for G.J. Gardner Homes in Australia and New Zealand, noted increased interest in multigenerational homes since 2021.
These homes offer features like several main bedrooms, spacious kitchens and living rooms, multiple living spaces, and areas that provide privacy for children or parents.
‘Our intergenerational home designs are only increasing in popularity,’ he said.
‘The current inflated cost of living pressures and rising housing costs, particularly in areas such as Sydney and Melbourne, have made it increasingly difficult for families to afford separate homes.’
As housing prices continue to outpace wage growth, multi-generational living will likely become more common.
According to Canstar, the 13 interest rate increases since May 2022 may have substantially raised mortgage repayments, potentially by up to 62 per cent on a $600,000 loan over 30 years. This could translate to an additional $1562 in monthly expenses for households.
For instance, a couple with a combined household income of $191,162 might allocate over a third of their earnings towards mortgage payments if they have an average loan of $628,449.
In regions like New South Wales, where average loan sizes are higher, this percentage could climb as high as 44 per cent of after-tax income.
‘The reality is housing in this country continues to get more expensive, far more rapidly than wages go up,’ Fotheringham said.
‘People are looking to diverse solutions, and this (multi-generational housing) is actually one of the more sensible and straightforward ones.’
Pamela expressed her preference for moving in with her parents rather than carrying a heavy burden of debt.
‘We're never going to be able to afford on a normal income to buy a $3 million house without some sort of inheritance...it's just not possible unless you're both earning well over $200,000 each,’ she said.
‘I think people are going to slowly realise it (the high price of housing) is not worth it.’
While families may need to adapt to the reality of multi-generational living, Fotheringham believed it was a good thing.
‘Understanding the roles people play—who's in charge—who's the parent here and so on, is something to navigate, but it's something that people have done for thousands of years,’ he said.
It may not be the ideal situation for everyone, but multi-generational living can offer a lifeline for families struggling with financial stress.
Pamela saw a silver lining to this situation. As she would put it, 'You just have to get through each day and be with the ones you love. That's it at the end of the day.'
Are you considering a multi-generational living arrangement? Or perhaps you're already living this way? Let us know in the comments below!
More and more families are moving back in with their parents or grandparents, creating multi-generational households.
While not new, this trend is gaining momentum as families grapple with the economic fallout of the COVID-19 pandemic and the rising cost of living.
Take the case of Pamela (name changed for privacy), a 42-year-old mum of two. She never imagined she would return to her childhood home, let alone with her husband and children in tow.
She had left home at 20, bought her own apartment at 27, and comfortably paid her mortgage for 14 years.
However, the pandemic's travel restrictions decimated her 15-year-old business, leaving her with a debt of around $6000.
Some families are forced to live with parents or grandparents due to the cost of living crisis. Credit: Shutterstock
‘It was very strange lying in the bed, going to sleep with my husband, knowing my parents were in the other bedroom, my boys were in another room. And I was in my brother's old bedroom,’ Pamela said.
‘There's been lots of tears, put it that way.’
Despite Pamela and her husband working multiple jobs, they couldn't keep up with their expenses.
Their combined income of around $70,000 was insufficient to cover their debt and their $340,000 mortgage, which had risen to about $2600 a month due to multiple rate hikes.
The financial stress was so severe that Pamela's parents suggested she move back in with them.
‘We were behind on strata bills, we were behind on council rates because we just didn't have the income to cover it,’ she said.
Moving back home, however, was not without its challenges.
Pamela grappled with feelings of guilt and shame, particularly as her parents, who were enjoying their retirement, had to adjust to the noise and energy of her two young boys.
Her mum was a cancer survivor and had retired, so she was previously enjoying a quiet life and not having to work.
‘The number of times I've cried because I've put my parents in this situation, and when they start to argue and then I go “it's all our fault”. It's awful,’ she explained.
'You are meant to be a grown adult, and they [her parents] are meant to be living their life, and you've turned everything upside down.’
‘And then we come with two very energetic, loud boys. So, I think everyone's had to adjust. I've lived on my own since I was 20, I'm now 43, so it is an adjustment.’
Pamela's husband helped with gardening and maintenance, and her parents babysat the children, allowing Pamela and her husband to work more hours.
The children also benefited from the arrangement, forming a close bond with their grandparents and enjoying the space to play sports, which they didn't have in their apartment.
Pamela's story is not unique. The rising cost of living drives more families to adopt multi-generational living arrangements.
According to Dr Michael Fotheringham, Managing Director of the Australian Housing and Urban Research Institute (AHURI), multi-generational living was already popular among some cultural groups in Australia.
However, the ‘cost of living, and in particular the cost of housing, are real drivers of this trend’.
‘It is definitely a growing trend for adult children with kids of their own to move back in with their parents, or in fact, not move out in the first place and have three generations living in a household by choice, for a range of reasons,’ Fortheringham said.
Data from the Australian Bureau of Statistics showed a 22 per cent increase in three-generational living arrangements over five years, from 275,000 in 2016 to 335,000 in 2021.
Home builders have also noted the trend, with many promoting homes designed for multi-generational families.
Compare the Market’s Economic Director and former Sunrise host David Koch described the housing situation as a ‘tough pill’ for young Aussies who have not had time to save up.
For him, ouse prices had gone way up compared to what people earn, and this was happening faster than wages were growing.
Chris Thornton, the Chief Operating Officer for G.J. Gardner Homes in Australia and New Zealand, noted increased interest in multigenerational homes since 2021.
These homes offer features like several main bedrooms, spacious kitchens and living rooms, multiple living spaces, and areas that provide privacy for children or parents.
‘Our intergenerational home designs are only increasing in popularity,’ he said.
‘The current inflated cost of living pressures and rising housing costs, particularly in areas such as Sydney and Melbourne, have made it increasingly difficult for families to afford separate homes.’
Multi-generational living is slowly gaining popularity among families. Credit: Shutterstock
As housing prices continue to outpace wage growth, multi-generational living will likely become more common.
According to Canstar, the 13 interest rate increases since May 2022 may have substantially raised mortgage repayments, potentially by up to 62 per cent on a $600,000 loan over 30 years. This could translate to an additional $1562 in monthly expenses for households.
For instance, a couple with a combined household income of $191,162 might allocate over a third of their earnings towards mortgage payments if they have an average loan of $628,449.
In regions like New South Wales, where average loan sizes are higher, this percentage could climb as high as 44 per cent of after-tax income.
‘The reality is housing in this country continues to get more expensive, far more rapidly than wages go up,’ Fotheringham said.
‘People are looking to diverse solutions, and this (multi-generational housing) is actually one of the more sensible and straightforward ones.’
Pamela expressed her preference for moving in with her parents rather than carrying a heavy burden of debt.
‘We're never going to be able to afford on a normal income to buy a $3 million house without some sort of inheritance...it's just not possible unless you're both earning well over $200,000 each,’ she said.
‘I think people are going to slowly realise it (the high price of housing) is not worth it.’
While families may need to adapt to the reality of multi-generational living, Fotheringham believed it was a good thing.
‘Understanding the roles people play—who's in charge—who's the parent here and so on, is something to navigate, but it's something that people have done for thousands of years,’ he said.
It may not be the ideal situation for everyone, but multi-generational living can offer a lifeline for families struggling with financial stress.
Pamela saw a silver lining to this situation. As she would put it, 'You just have to get through each day and be with the ones you love. That's it at the end of the day.'
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