What is home co-ownership and can it put you on the fast track to owning your home?
As house, land and apartment prices soar to record highs across Australia, the barrier to entry on the property market has become an even more distant dream for some.
The great Australian dream of owning seems farther than ever and this holds especially true on the income of a single person, with more and more Aussies holding out on buying their first home, or any home until they have a partner.
Some however have turned to co-ownership.
It’s a natural extension for some, to go from renting a property with their best friend or siblings, to owning one together.
In NSW in particular, there have been a growing number of property co-owners who are not married or in a de-facto relationship with their co-owner.
Not only is this happening among friends and family, property co-ownership is even occurring among strangers, with new proptech firms, such as BrickX and DomaCom, focusing on fractional ownership.
BrickX focuses on individual houses and units, where investors can buy Bricks that make up a percentage of the value of the property.
A Brick’s value will change depending on the most recent evaluation of the property’s value as well as what people are willing to pay, similar to the stock market, it’s speculative.
DomaCom operates in a similar fashion, but with investments on a larger scale across many segments of the market, where purchasers are locked in for a certain period of time.
The newest co-ownership proptech is Mortgage Mates, described as something similar to a dating website for home ownership.
Calling themselves, “the Bumble of home ownership,” they match clients with other individuals (Mates) who have the same housing preferences, to own and live in a home together.
A more established example is Co-Own.com.au where multiple parties have a purely business relationship with just one party/person as the owner occupier.
There are different pro’s and con’s to shared ownership of a property amongst friends, family and strangers.
The main positives of co-ownership are mainly the normal benefits of owning a property, quicker access to the housing market, safer and more flexible investment options and not “throwing your money away” on rent.
Negatives abound, changes can arrive in your relationship with the friends you are co-owning with, they could find a partner, have a child, fall ill, default on the loan or even have a falling out with you.
The best way to mitigate some negatives is a contract and for services like Co-Own.com.au, they even recommend a property manager, but these can only do so much.
