First-time buyers increasingly relying on help from parents to buy first home: ING

First-time buyers in the Netherlands are increasingly dependent on donations from their parents to help buy their first home, ING reported in its 2024 Housing Survey. A greater proportion of first-time buyers had help from their parents, and the amount parents donated also rose. According to the bank, this increases both home prices and inequality with home seekers whose parents cannot afford to help.

Despite the tight housing market and sky-high prices, first-time buyers have been increasingly successful in finding a home to buy in recent months. That is largely because of withdrawing investors putting their rentals up for sale, but also because first-time buyers have more to spend.

Home seekers who succeeded in finding and buying their first home increasingly have a disposable income that falls into the higher income categories, according to the bank. Last year, 66 percent of first-time buyers had a relatively high income, compared to 57 percent in 2018.

They also contribute more of their own money to the purchase. Figures from the NVM show that first-time buyers put down around 45,000 euros outside of their mortgage in 2024, an increase of over 30 percent in four years.

“Increasingly, parts of this own contribution are received from parents or parents-in-law,” ING said. Last year, 31 percent of first-time buyers received a gift from their parents to buy their first home, up from 19 percent in 2021. The amount of the gift has also increased. On average, parents gave first-time buyers around 58,000 euros in 2024, up from around 40,000 euros in 2018.

ING noted that the amounts vary widely. Nine percent of all first-time buyers received 100,000 euros or more from their parents last year. Considering only the first-time buyers who received help from their parents, 1 in 4 received over 100,000 euros. For first-time buyers who did not receive a gift from their parents, the main reason was that their parents could not afford it.

ING raised concerns about the effect of parental help in buying a home. “Due to the higher gifts, some households can bid more, which drives up house prices,” the bank said. “Other home buyers who did not receive a gift also increased their bid to remain competitive.” And that weakens their financial position.

The bank also raised concerns about inequality. “The wealth of first-time buyers is playing an increasingly important role in the housing market. Wealth that increasingly comes partly from parents,” the bank said. “And because owning a home is an important way to build wealth, this creates a self-reinforcing effect.”