New research from CommBank has revealed that a quarter of Australians have considered buying property with a ‘non-traditional’ partner including parents, siblings or friends.
When asked what was driving this trend, over two-thirds said affordability was the main driver, followed by buying a bigger/better property and spreading the financial risk if anything went wrong.
Commonwealth Bank’s Executive General Manager of ³Ô¹ÏÍøÕ¾ Buying Dr Michael Baumann said while rising house prices build equity and help create wealth for incumbent owners, they also pose affordability challenges to first homebuyers looking to enter the market, and those looking to sell and upgrade. As this trend continues, it’s important that lenders support customers with innovative lending solutions that help them get on to the property ladder.
“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
“Along with our competitive pricing and new ³Ô¹ÏÍøÕ¾ Buying Hub in the CommBank app, 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.
“This is in addition to our support for first homebuyers through the Government’s first homebuyer schemes which help customers buy with a deposit of as little as two per cent.”
The research also looked at what may prevent potential property buyers from purchasing a home with a friend or family member and the vast majority of respondents said they did harbour concerns about putting the relationship under strain/pressure. Property Share gives borrowers the ability to support one another into the same property while providing confidence and protection of separate financial obligations.
Other reasons for not wishing to buy property with a ‘non-traditional’ partner included the complicated process of co-buying and co-owning (43 per cent), while a further one in 10 respondents didn’t know it was possible.
FOMO is driving customers to buy, buoyed by prices
Unsurprisingly, the rising cost of property and, in turn, the size of the deposit needed are the two most common barriers to property ownership in Australia.
This comes as both property owners and non-owners alike recognise how difficult it is to buy property, with nearly 60 per cent of property owners stating it is difficult to buy a property and three-quarters (78 per cent) agreeing it is harder for the current generation to purchase a home including those over 50 (73 per cent).
Interestingly, the data found that while price is the biggest barrier to entry for potential property buyers, it is also the biggest incentive – with over 60 per cent saying they are worried about being priced out of the market, and more than one third (35 per cent) saying they have a Fear of Missing Out (FOMO).
Australians also feel pressure from friends and family, with 44 per cent of those property buyers who admitted to feeling pressure saying that the push comes from friends/colleagues who have already bought and parents/family who want them to buy.
Pressure to buy combined with rising property prices has resulted in more than one third of Australians (37 per cent) to consider moving interstate/to a regional town to buy property in search of more affordable options that require less compromise on proximity to work or size of property.
Further, flexible working arrangements introduced during COVID-19, means many Australians now feel comfortable considering moving interstate. According to the data, 45 per cent of those under the age of 40 years said working from home has changed how they think about property.
Those in Victoria have seen the biggest impact on their consideration for a home with an outdoor space, near nature or in a regional area.
Property Share
Borrowers must be owners of the property and guarantee each other’s home loan as security. Customers retain complete control of their finances so each borrower has the flexibility to structure their home loan to suit their individual needs by choosing their loan amount, loan type, loan term and repayment structure.
Customers are encouraged to speak to their CommBank lender or broker or check out
