According to Tom Isaacs, director of Bendigo’s PRDnationwide, people are often choosing to spend their money differently, on luxuries such travel, rather than the traditional Australian dream of owning a home. This means when they do decide to purchase a home, previous spending habits have reduced its affordability.

“I think as a rule, housing in regional Victoria is still very affordable,” he said. “However, we are seeing more and more purchasers being guaranteed by parents for first home owners. This allows purchasers with suitable incomes to purchase a home by utilising security in their parents homes, thus not having to provide the traditional deposit sought by the financial institutions.” 

Isaacs said another consistent theme in the existing market is the cost of stamp duty to first home owners. “Whilst they are receiving concessions, the extra savings required to cover a purchase and stamp duty can make it very difficult.”

Mortgage Choice’s Jessica Darnbrough said there was an increase in first-home buyers co-buying with friends and family from 7.9 per cent in 2014 to 9.2 per cent in 2016.

“Given that property prices have risen fairly consistently across most markets in Australia, it is little wonder why we have seen an increase in the number of first home buyers who are buying property with their friends and family,” Darnbrough said.

Company coHome helps young Australian home buyers by providing a platform to help co-ordinate the co-buying process. Its survey of 350 people in the Millennial age bracket found 60 per cent would consider joint ownership with friends or family.

In Australia, it’s likely co-buying will become more popular, with RateCity research finding one in seven Gen Y’s requiring three incomes to afford repayments on a first home and 50 per cent needing help from their parents.

“A double income doesn’t cut it for a lot of young would-be homebuyers now. House prices are on the rise, as is cost of living, so it’s really hard to save for a deposit,” RateCity data insights director Peter Arnold said.

But there are some downsides to the strategy. Firefly Wealth certified financial adviser Adele Martin has had several clients buy with family members, and sometimes the outcome wasn’t ideal.

One client, who bought an investment property with his father, later wanted to purchase his first home. “Now he is buying his home, having that investment property impacts his ability to borrow. Even though he only has a loan on half of it, the whole loan is assessed against him.”