PARTNERING up to break in to the property market is becoming even more popular as the proportion of single buyers dwindles.
While interest rates remain at record lows, house prices have softened and first-home buyer grants have been wound back, a growing number of property hopefuls are joining forces to try to make it easier to break into the property market.
ING Direct, the nation’s fifth largest lender, found the number of single first-home buyers has fallen from 55 per cent in 2009 to 43 per cent this year.
ING mortgage products manager Tim Newman says there is a combination of factors that has led to fewer people signing the dotted line on their first home loan themselves.
“Property prices have come off over the last few years. . . prices in general are still quite high, so the level of affordability still remains a challenge for most,” he says.
“At the same time, we’ve seen a lot of change in the level of government incentives for first-home buyers and changes in the way they are structured.
“They are geared now to only construction of new dwellings, so that presents a challenge for first-home buyers.”
Data from Loan Market has also seen a downward trend of single first-home buyers.
Spokesman Paul Smith says in the year to June, Loan Market saw a 15 per cent rise in the number of first-time buyers inquiring about mortgages with more than one person.
Danielle Johnson, 27, and her husband Nathan, 28, bought a two-bedroom townhouse together last year.
She says the barrier of breaking into the property market was far more achievable by doing it with someone instead of going alone.
“It was much easier doing it together. We could pool funds and get the deposit together and make the repayments together,” she says.
“We were lucky we both had inheritances from our grandparents and had that as a nest egg, and we were both living at home intentionally so we could save more.
“I wasn’t paying rent or paying any bills so my wage was going towards saving for a deposit.”
ING Direct’s Newman says while saving a deposit is a tough challenge, first-home buyers should try and build up a deposit of at least 20 per cent so they can avoid hefty costs, including paying lender’s mortgage insurance, which could be thousands of dollars.
Original article published at www.news.com.au by Sophie Elsworth, News Limited Network 4/8/2013