Buying property was always a lifelong dream for Georgie (29), but never one to fit the mold of tradition and wait until settling into a relationship, she set her sights five years ago on an investment partner much closer to home- her brother, Euan (32). “My brother and I were always close growing up- we’re only 2 years apart and because there’s only two of us, there was never a concern about buying together and not getting along as housemates”.
The “Sibling Act”
Georgie and Euan
Occupation: Marketing manager and Architect
Mortgage saving time: 18 months- 2 years
Time in market: 1 year
While her friends were enjoying the weekends of their early twenties bar hopping and on shopping sprees, Georgie was hopping from one open for inspection to another with her brother and mum, Helen. “Owning a property was always a milestone I wanted to accomplish, and despite being 24 and on a salary typical of someone embarking on their marketing career, I was always a saver who never wanted to let my age or circumstance become an excuse for not achieving this goal”. Georgie and Euan are part of a growing trend of Australians, who despite living in an increasingly expensive property market, in a time where people are settling down and marrying later, are opting to buy with a sibling in an attempt to get their foot on the property ladder.
A new report from ING Direct suggests the number of joint mortgages nationwide is increasing. Victoria, for example, has increased approximately 9% in the last seven years- 77% of which were joint candidates such as family members. Queensland is the state with the highest proportion of joint mortgages, with 80% or 4 of 5 mortgages being in joint application. ING Direct’s John Arnott says “the Australian dream of owning property is still very much alive and well – people are simply finding other ways of getting onto the property ladder and we’re seeing more people teaming up to ‘divide and conquer’.” Such trends are concurrent to house prices increasing, says Arnott. Real Estate Institute of Victoria CEO, Enzo Raimondo, validates this by explaining that “this is an innovative way for buyers to enter the market and secure a home of their choice”.
What were they looking for?
The intent throughout the search and bidding was always to invest in a house with its “own title”, meaning that you own the land and it’s not shared with others like it may be in a town house. They were not interested in purchasing an apartment due to the future growth/potential development opportunities. Euan says “we also were looking at a minimum 2 bedroom, 1 bathroom but the wishlist was 3 bedroom, 2 bathroom, offstreet parking with a backyard.
How did they afford it?
Georgie admits to always being a saver, but like many first home buyers, affordability came at the expense of forgoing nights out and luxury items such as clothes and holidays. Euan was also an existing home owner as he already had purchased a property in regional Victoria, so that was used as equity to buy the joint property in metro Melbourne. Euan says “I suppose one thing which helped me was to concentrate on preparing meals from home which eliminated spending on meals out… Also I made a conscious effort to cut back on drinking socially and would only have one or two when out”.
Searching: What helped them in finding their dream home?
“We were fortunate to have parents who work in banking, so that knowledge and advice never went amiss”, Georgie explains. While the market has undoubtedly changed since having purchased, she believes signing up for property alerts and downloading the latest apps as key to be able to stay up to date with what’s new on the market, and what houses are selling for in your area of choice. “I wish that I knew about auction and sales results alerts– being able to receive emails on Saturday night wrapping up the week’s sold properties in Northcote where we were searching would have been really helpful, as it would have given us a better idea of what houses were selling for and what we were likely to pay”.
Euan advises that understanding the future growth prospects of your target suburb can really help refine your search- councils focus on making certain pockets “trading/pedestrian hotspots” along with pushing for growth in these zones. We were interested in a growth hot spot which we knew councils would be spending money on local infrastructure to enhance the area (eg. bike lanes, tram superstops, etc) so we believed the investment would be a good for future growth even if the market weakened.
Do they believe first home buyers have it tougher today?
“The price of houses are increasing significantly more in comparison to salary increases- so yes, it is hard for first home buyers to purchase right now”. Despite such challenges, Georgie feels optimistic that once buyers can afford, life isn’t all too dire if you’re buying in a major city and have to move further out to afford. She explains that “with the amount of available home loans on the market, smaller financial players and public transport, moving to outer suburbs affordably isn’t the end of the world given Melbourne’s strong public transport and regional development”.
Would you purchase with a brother or sister? What would your advice be to homebuyers who want to purchase with a sibling?