8 Ways To Get Into Property Market

The Commonwealth Bank’s Future Home Insights predicts the Australian property market will undergo a major makeover with eight emerging economic and social trends that will help people into the growing market.

The research reveals future homes will be sold to fit a growing population and change to suit a rise in urban living trends.

Commonwealth Bank’s executive general manager of home buying Dan Huggins said the trends would drastically change the property market.

The study showed that by 2030, potential buyers would secure a home through co-housing arrangements, group loans between siblings or friends as well as joint-ventures and syndicates, guarantor loans, crowd housing and buying shares in an individual property. The report also predicts that homebuyers will find big investment opportunities through guesthousing apps like Airbnb.

8 ways to get a foot in the door

Collaborative buying

Co-living arrangements could become more sophisticated with the emergence of collaborative buying or living models. ‘Co-housers’ typically own or rent a smaller-sized dwelling that’s part of a bigger development and contains some communal areas. If residents can share spare rooms, living areas, storage sheds and laundries, then each house can be smaller — and therefore more affordable.

Group loans

A growing number of people are splitting the costs of buying a home by partnering with a sibling or friend so they can share mortgage repayments. Analysis by CommBank shows that the number of applications with two or more applicants has risen from 64 per cent in 2014 to 67 per cent in 2016. This approach coincides with the rise in multi-generational living.

Communities in common

By 2030, new dwellings will average 119sq m, around half the size of today’s average house. To cater for the downsize, developers and architects are designing communities that encourage people to share common spaces with other people.

Joint-ventures and syndicates

Pooling funds to gain greater buying power is becoming more common in Australia.

Increasingly, all kinds of people, from siblings to cousins and friends, are coming together to enter the property market as a group.

Guarantor loans

Australians may be familiar with guarantor loans as a way for parents to form joint property ventures with their children. These loans help young people get into the housing market sooner by allowing parents or family members to use their own property as additional security.

Crowd housing

Online crowd-housing platforms are connecting homebuyers who share common interests with property developers and architects. For buyers, it means they’re able to express their needs to property developers in real-time; and for developers, it means reducing settlement risk by creating more attractive apartments that specifically meet the needs of buyers.

Staircasing

Moving up the property ladder by buying more shares in an individual property, and hopefully one day attaining full ownership, is known as “staircasing”. Instead of buying a house outright, homeowners are buying a share in a property and gradually increasing this stake as their savings grow. Examples include a British government scheme, which allows homeowners to pay as much as they can afford — usually between 25 per cent and 75 per cent of the total value of a property — increasing their ownership stake when funds allow.

Guesthousing

Australia is seeing a rise in accommodation services such as Airbnb that help homeowners turn their spare bedroom or couch into money.

Extract from Gold Coast Bulletin 10 November 2016

 

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