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Almost half of Australians think that purchasing property with someone who isn’t a spouse or partner will become common practice, ING has found.
Non-major bank ING Australia has released new research this morning (18 April), which showed that 46 per cent of Australians believe that purchasing property with someone who is not a spouse or partner will become common practice in the next decade if house prices continue to rise.
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The research was conducted online by market research firm YouGov between 26 and 29 February on a sample of 1,081 Australian adults aged 18 and older.
ING’s research revealed that 47 per cent of Australians who have purchased or are looking to purchase a property with someone who isn’t a partner or spouse said they would consider buying with a friend or becoming “property pals”.
As a proportion of Australia’s population (based on the Australian Bureau of Statistics’ population data), ING found that this would equate to 3.5 million Australians.
Gen Z – which includes those born between 1995 and 2009 – was the most likely generation to become property pals, with 50 per cent saying they would consider it.
Millennials followed behind as 35 per cent said they were open to buying a property with a friend, followed by Gen X (28 per cent), and Baby Boomers (14 per cent).
The research found that approximately one in four respondents would consider becoming property pals to share payments and responsibilities and to have more flexibility around where they choose to buy their home.
According to ING, a further 22 per cent of respondents said they would consider purchasing property with a friend as a more environmentally friendly option than living by themselves.
Almost one in five respondents (19 per cent) of Australians in the survey said that they would purchase with a friend so that they could own a larger home.
Of those who are considering purchasing property with, or have purchased a property with someone who isn’t their partner or spouse, 32 per cent said they would consider becoming a property pal to build a property portfolio, while 29 per cent said they would consider it if they were purchasing a holiday home.
Matt Bowen, head of consumer and market insights at ING, said: "Property prices have been on an upward trajectory for some time now and the costs of living are proving a real sting for many. But despite this, the great Australian dream of homeownership is not dead – it’s just different.
“As this research has shown, young Australians are being smart about how they reach their property goals by exploring the Property Pals concept."
Bowen prefaced that while coming property pals would allow Australians to purchase a home faster, it was important to consider the risks of such an investment. He continued that future home buyers looking to purchase with someone who isn’t a partner or spouse should speak to their broker to ensure successful outcomes.
He commented: “Talk to your broker or talk to your bank to make sure you’re going into it with a good plan for a successful outcome.”
Property pals should seek financial advice before purchasing a home, Bowen advised, to consider all ownership options, pointing out that complications may arise if one person wishes to sell the property.
He said: “Make sure you seek legal and financial advice about ownership options before entering any financial commitment. You should also formalise the mechanics for future possibilities – for example, what will happen if one of you wants to sell?”
Bowen continued that potential property pals should conduct their own research about mortgage options and be aware of repayment requirements.
The head of market insights advised: “Do your research about your mortgage options and be aware that you’re both accountable for repaying the loan. If one person can’t make their repayments, the other may need to chip in.”
The announcement came as ING revealed that brokers were the ‘most critical source of growth’, with more than 90 per cent of its businesses originating through the broker channel.
ING also appointed a new head of home loans, George Thompson, earlier this year who is now leading the bank’s newly formed home loans business, after working with the bank for seven years.
ING’s research came as a new co-ownership app has launched, which aims to help buyers purchase and manage property with friends and family, and engage with mortgage brokers and conveyancers.
[Related: New app launched to help Australians buy property together]
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