Houses for children as young as 4 to give them a chance in property market

Parents concerned about rising house prices are increasingly buying properties for their children - some while they are still at primary school.

Children as young as 4 are having houses bought for them by parents who then rent out the property until the child can legally own it at 18.

Others have started home deposit funds to help children when they become first-home buyers.

Alan Henderson of property agency Erskine and Owen has matched investment properties with several clients who were buying for preschool and school-aged kids.


"One couple are in the process of buying their second property of three for their children who are 5, 6 and 8 years old," Henderson said.

"It is usually when the children are at primary school and the parents have a bit more of a disposable income and they want to set their children up."

Janet Xuccoa at property accountancy firm Gilligan Rowe knew of many families who had started home deposit funds for children and grandchildren.

"It is a very smart idea," Xuccoa said. "If they can't afford to buy a property then putting money in an account each week, if they can afford it, is sensible."

One grandmother spoken to by the Herald on Sunday had opened "home deposit" bank accounts for her two granddaughters at birth and had been been putting $20 a week into each account.

"We know it is not going to be enough for them to buy a house but it will help out with a deposit and it is what we can afford to do," the woman said.

Xuccoa said parents were commonly buying a property they could rent out until their child was ready to take ownership or move into it.

Matt Kynoch and wife Alicia said they would love to buy daughter Charlotte, 3, a real house one day but as a young couple they are focused on getting themselves mortgage-free.


"We are scared to think what things will be like in 20 years when Charlotte looks to buy a home."

The family's replica villa, built by brother Andy, father Barry and Matt, was for sale on TradeMe but failed to reach the $20,000 reserve.

The miniature villa has been used in a TV ad for AMI Insurance.

John Bolton from Squirrel Mortgages said parents were also using term deposits to guarantee home loans for their adult children.

"We are doing at least one of these a week," Bolton said.

"It is more attractive for parents because they can still earn money on the deposit and they do not have to put their house up."

Auckland parents bought their two girls a house each. Photo / Chris Loufte
Auckland parents bought their two girls a house each. Photo / Chris Loufte