Faced with rising property values, first home buyers are banding together with friends and family.
Buying a first home has never been easy but today’s high property prices are making it especially challenging. Add in the watering down of government incentives for first home buyers – and the scrapping of First Home Saver Accounts in the 2014 Federal budget, and you could forgive first home buyers for giving up on the dream of home ownership altogether.
But rather than toss in the towel, it seems first home buyers are turning to smart strategies, and a favourite is teaming up with friends and family to purchase a property jointly.
It’s a step often termed ‘co-buying’, and research by ME Bank reveals just how popular this strategy is especially among younger first home buyers. According to ME Bank, 14% of buyers have purchased jointly with parents, and 12% have bought with other family members. A smaller proportion – 4%, have purchased with friends.
Co-buying offers valuable advantages. By pooling resources, buyers can afford a better quality home or a more desirable location. Ongoing costs like rates, insurance and maintenance are also more manageable.
Making it work
Despite the pluses, buying a property with someone else calls for planning. Rather than simply hoping it will all work out, it makes sense to have a formal co-ownership agreement drafted by a solicitor. This will set out in writing how various possibilities will be handled by everyone – from the arrival of a partner on the scene to what happens when one owner wants to sell up.
With property values remaining strong, the trend of co-buying looks set to gain momentum. It could be just the solution that lets young buyers climb the property ladder while bringing families and friends closer together.
To find out more or talk to one of our mobile bankers go to mebank.com.au/homeloans or call us on 13 15 63 to have a Mobile Banker visit you at your convenience.