Some unorthodox approaches to buying a first home

Achieving the so-called “Australian dream” of home ownership is increasingly difficult for members of younger generations. Census data shows^[1] that rates of home ownership have fallen from 64% in 1971 to 50% in 2021 among 30–34-year-olds, and from 50% to 36% for 25–29-year-olds.

The reasons for this have been well canvassed in this housing series. This article focuses on some of the more unorthodox arrangements I have come across in my years spent researching^[2] young adults’ pathways into home ownership^[3].

We’ve asked experts to unpack some of the biggest topics for first-home buyers to consider – from working out what’s affordable and beginning the search, to knowing your rights when inspecting a property and making an offer. Buying a property as a ‘tenant in common’ Due to the high cost of housing relative to incomes, those in dual-income households^[5] are comparatively more likely to enter home ownership.

Most of my research participants^[6] over the years have purchased with a spouse or significant other as joint tenants^[7]. This means they hold an equal share of the equity in the property, and the property will immediately pass to the other if one person dies. However, a minority of participants have purchased with someone other than a spouse, and have done so as “tenants in common^[8]”. This means they can own distinct and potentially unequal shares of the property, and there is no right of survivorship. Data on the prevalence of these arrangements is limited. However, a recent industry survey^[9] found that 5.7% of their respondents had purchased property with a sibling, 4% had purchased with a friend, and another 2.1% had purchased with an extended family member. When I first spoke to Sophia, aged 32, she explained she had purchased an investment property with her twin sister at the age of 25. At that time, both sisters were single, and Sophia said: We trust each other, so we would only buy with each other, you know.

When I spoke to Sophia initially in 2022 she was happy with this arrangement. However, by 2024, her circumstances had changed. Both Sophia and her sister were in relationships, and Sophia had just begun maternity leave. Sophia’s sister and her partner wanted to move into their shared property and pay rent to Sophia for the portion she owned. Sophia was concerned about this arrangement because she did not feel comfortable enforcing periodic rent increases on her sister. She planned to rely on the rental income to extend her maternity leave. While buying with a sibling or friend may provide a means of getting your foot on the property ladder, it can be nevertheless accompanied by some well-documented challenges^[10].

Another way in: rentvesting The strategy of buying an investment property while living in a rental property (termed “rentvesting”) has come up frequently in my research. Indeed, analysis of Australian Bureau of Statistics data^[11] in 2024 found that rentvestors accounted for 6.85% of the first home buyer market. When I spoke to Madeline, aged 33 and living in Sydney, she could not afford to buy an apartment in her local area. After consulting with her mortgage broker, she decided to instead buy a property in Western Australia as an investment. While Madeline was very positive about this arrangement, it is important to note she was living in a property owned by her partner, to whom she paid rent. In this way, she was buffered from some of the challenges faced by those living in the private rental sector^[12], such as frequent rent rises or one-year leases.

Alternative ways to save a deposit Living rent-free in the family home is a well-established^[13] means of accelerating the rate of saving for a deposit. However, this option is not available to everyone.

Genevieve, aged 29, had migrated from France and did not have the option of living with family while saving for a deposit. So she decided to start house sitting. She organised her house-sitting engagements through an app and, over time, developed a network of home owners who trusted her to care for their pets and houses while they travelled.

After just over two years of house sitting, Genevieve was able to purchase an apartment. However, she described negotiating her house-sitting arrangements as “basically a part-time job”, and reflected on the fact she had no fixed address during this time and was “basically homeless”, highlighting the underlying precarity of her living situation.

Throughout my time researching young adults’ pathways into home ownership I have come across a range of unusual or unorthodox arrangements. Some other examples include living in tiny homes^[15] or alternative dwellings such as shipping containers^[16], or asking parents to “invest” in their homes^[17] (although these arrangements are rarely formalised, leaving open the question of when any gains might be realised).

These home ownership strategies all share two things in common: their viability is highly contingent on individual circumstances, and those who engage in them successfully have a relatively high degree of privilege and social support.

While these strategies are successful for some, they are not necessarily possible or appropriate for most aspiring first home owners. This highlights the need to resist promoting individual solutions to a challenge that is structural in nature, and to continue to advocate for a fairer and more accessible housing system.

Editor’s note: All names used in this article are pseudonyms to protect research participant privacy.

Disclaimer: This article provides general information only and does not take into account your personal objectives, financial situation, or needs. It is not intended as financial advice. All investments carry risk.

References

1. ^{^} Census data shows (www.aihw.gov.au)
2. ^{^} years spent researching (www.tandfonline.com)
3. ^{^} pathways into home ownership (doi.org)
4. ^{^} buying a first home (theconversation.com)
5. ^{^} those in dual-income households (www.ahuri.edu.au)
6. ^{^} Most of my research participants (www.tandfonline.com)
7. ^{^} joint tenants (www.ato.gov.au)
8. ^{^} tenants in common (www.ato.gov.au)
9. ^{^} a recent industry survey (www.comparethemarket.com.au)
10. ^{^} well-documented challenges (www.afr.com)
11. ^{^} analysis of Australian Bureau of Statistics data (mozo.com.au)
12. ^{^} living in the private rental sector (theconversation.com)
13. ^{^} is a well-established (theconversation.com)
14. ^{^} Nicolas Armer/picture alliance via Getty Images (www.gettyimages.com.au)
15. ^{^} tiny homes (theconversation.com)
16. ^{^} such as shipping containers (theconversation.com)
17. ^{^} asking parents to “invest” in their homes (www-tandfonline-com.ezproxy.newcastle.edu.au)