Around one in four Australians are considering buying a property with a partner other than their spouses.
A recent study by CommBank showed these homebuyers are looking to enter the market with a “non-traditional” partner like their parents, siblings, and friends.
Around two-thirds of these homebuyers cited affordability as their top reason why they want to co-own a property.
Another common reason for this trend was the desire of many homebuyers to buy a bigger and better property while spreading financial risks.
According to the study, while the growth in house prices is buffing up household wealth of existing owners, it also prices out many would-be homeowners and those looking to upgrade.
CommBank executive general manager of homebuying Dr Michael Baumann said one of the solutions currently in the market is CommBank’s Property Share feature, which allows homebuyers to split the cost with someone else while retaining individual control of their finances.
“Property Share is a little-known feature among customers but with growing challenges around housing affordability, it may be appealing to customers who are looking for new ways to be able to afford a property given the current market conditions,” Dr Baumann said.
How CommBank’s Property Share works
Borrowers entering a property share agreement must be owners of the home and must guarantee each other’s home loans as security.
“Property Share is another way we are helping customers who are struggling to save for a deposit by enabling them to split the cost of buying a house with friends or family while keeping their finances, ownership and repayments separate,” Dr Baumann said.
Dr Baumann said with this program, buyers will be able to buy a bigger or more expensive property than they would otherwise be able to afford on their own.
Each borrower will be able to access useful loan features such as redraw facilities, offset accounts, and lines of credit.
While this arrangement is available not just to first-home buyers but also investors, it may not be used for business purposes, bridging loans, land purchase or building and construction loans.
Barriers to property ownership
The same CommBank study found that around three in five property owners and non-owners find it “difficult” to buy a property.
Furthermore, the same share of potential homebuyers said they are worried about being priced out of the market, with a third saying they have a fear of missing out (FOMO).
Another interesting finding is that close to half (44%) of Australians admitted to feeling the pressure from their friends and colleagues who have already bought their properties and from parents and family who want them to buy.
On the brighter side, many Australians are now more open to consider moving interstate due to the flexible working arrangements amid the COVID-19 pandemic.
Photo by Helene Lopes on Unsplash.