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December 22, 2015
Melbourne single first-home buyers can pair up to make ownership dream come true
December 2, 2015 2:25pm
SAMANTHA LANDYProperty reporterHerald Sun
Figures show 77 per cent of mortgage applications in Victoria came from joint candidates in 2014-15.
THERE may be a new solution for single first-home buyers struggling to afford Melbourne’s booming property market on their own — team up with a stranger.
A website created by a Melbourne property investor is offering to pair up wannabe homebuyers with shared real estate goals and help them enter the market together.
The “co-ownership portal” is a recent addition to homeaddressed.com.au, which was created in 2011 to offer advice and purchasing strategies to first-home buyers.
Site founder Di Ferrara — a licensed real estate agent who developed her own property portfolio through co-ownership — said the service was a first in Australia: “it’s much like (dating site) RSVP for real estate.”
Property experts say the concept could help lone homebuyers enter the market, as finding a “kindred spirit” to buy with was difficult, but urged co-buyers to make a clear plan for their property and be aware of the risks of relying on a partner.
Ms Ferrara said co-ownership was the only way many first-homebuyers could afford to buy in booming Melbourne to start earning equity and capital growth.
Co-buying a home should be treated the same way as entering into a business deal, Ms Ferrara said — the parties needed a legal contract that defined their obligations and expectations.
She argued strangers would likely be more comfortable approaching a house purchase as a business arrangement than friends or relatives who shared an emotional connection.
The registration process for Ms Ferrara’s co-ownership portal includes a personality test which helps buyers pick partners with similar property goals and purchase capabilities.
Ms Ferrara said while about 50 of her clients had shown interest in buying with a stranger, none had yet taken the plunge.
“The idea is in its infancy in Australia, but I believe the time is right,” she said.
“Co-ownership is popular in the UK — people put ads in the newspaper asking ‘is anyone interested in buying in London?’”
ING Direct figures show 77 per cent of mortgage applications in Victoria came from joint candidates in 2014-15 — a nine per cent rise over seven years in line with the jump in Melbourne home values.
Wakelin Property Advisory director Paul Nugent warned co-buyers to consider the implications of one party wanting out before the other, or failing to hold up their end of the bargain.
“Mortgages usually require each party to be jointly and severally liable for the debt — if the other party does a runner, the entire debt falls on your shoulders,” he said.
Director of property tax accounting firm Chan & Naylor, Ken Raiss, urged co-buyers to thoroughly discuss their expectations for the property before committing, but said a website to pair up co-buyers could have merit.
First-home buyer Holly McLaren said she was fully prepared to buy a home with a stranger before meeting her partner and purchasing with him in West Footscray.
“I was priced out of the market but also was determined to get in sooner rather then later,” the 26-year-old said.