Co-ownership - why buying with a sibling, friend or parent isn’t crazy

Millennials get a hard time in the press, dismissed as the wasteful generation obsessed with avocado on toast. When in fact more than a third of Aussies aged 22-37 are busy saving for their own home, with 57% happy to cut out avocado toast in the short term to get into a home in the longer term, according to ING's Millennial Homeownership Report.

But millennials, along with essential services personnel (nurses, teachers and police officers) are still priced out of the great Australian dream. - the median house price in Sydney sits at an unaffordable $1.1m and $900,000 for Melbourne- a huge leap from a median house price of $88,350 in 1986.

Only in the late 90s did people begin to feel the squeeze getting into home ownership. See the graph below where with the house price to income ratio starts to divide. Co-ownership alone is not the solution to housing affordability but can be the right move for many.

Commuting to affordable property

Today an entry-level nurse on $65,000 would have to travel more than 150 kilometres from Sydney to Cessnock, in the Hunter region to find an affordable house, according to a study done by the University of Sydney. If that same nurse wanted to live close to work it would take 13 years to save for a home deposit in inner Sydney. Barriers to buying a home include the deposit gap.

“Australia’s housing market has become a competitive sport, the winners make the most money and the losers are first home buyers and low-income earners,” said Nicole Gurran,  Professor of Urban and Regional Planning at the University of Sydney. Speaking at TEDxSydney on the 15th June 2018 she spoke about how “Houses have been converted into money making assets, with access to homes becoming deeply unequal”.

Co-buying with a sibling, friend or parent, done correctly can get you onto the property ladder sooner and reduce that deposit gap.

Combating housing unaffordability with co-ownership

Cutting back on little luxuries is not enough to help millennials or essential service workers own their own home in a reasonable timeframe. Buying a house is still a stretch, so one way to fast-track the journey is to team up and co-own. There's power in numbers and collective resources.

There’s more than one way to co-buy too. You aren’t just limited to living with your co-owner you could co-buy and...

  • Rent out your share to the other co-owner and live somewhere else
  • Both co-owners rent out the entire property and live somewhere else
  • Live in the property

The Co-owning journey

Kohab is a property platform and community that is making the process of co-buying a property with someone, easier, safer and more secure.

Kohab has developed a clear process, called CHASE to help co-owners reach their property goals in 5 steps:

1. Connect with people (if needed)

2. Hunt for Property

3. Agree your terms

4. Secure your home loan

5. Equity

1. Connect

The first step is to connect with the people you’re planning on teaming up with to Co-Own a property. These could be family, friends or members of the Kohab community.

2. Hunt

The second step is to find the property you want to buy with your fellow Co-Owner. Search over 100,000 listings on Kohab - share them with your connections and discuss them using our live chat system.

3. Agree

Now you've decided on the house you want, it's time to put what you've agreed with your Co-Owner in writing, via a Kohab Co-Ownership Agreement. This is a legal document designed to protect all parties and minimize risk as you buy together.

4. Secure

The last step before making an offer is to secure your Home Loan Financing, as well as any other legals and insurance required. Make sure you have all your documentation in order before taking the step to purchase.

5. Equity

You did it! You’re now officially a Co-Owner. Kohab offers a variety of post-purchase services to help make Co-Ownership easier to manage and maintain.

To learn more about how co-ownership can get you on The property ladder sooner, visit Kohab.com