When it comes to entering the property market, millennials are facing many obstacles that their parent’s generation didn’t. With the median house price in major Australian cities like Sydney and Melbourne now surging past $1 million, even our current Prime Minister, Malcolm Turnbull suggests parents should “shell out” and help their kids buy their first home.
However, not all millennials have parents who are able or willing to do this so other alternative avenues need to be considered. This is where a new Melbourne based startup, coHome comes in – a company that’s aiming to change people’s mindsets around homeownership.
“For most people, the desire is to own their own home, but the reality is, this isn’t always achievable, particularly for millennials,” says co-founder, Josh Littin. “But what might be achievable, is teaming up with others who are in the same boat in order to get onto the property ladder.”
Although still in the concept stage, coHome’s mission is to group people together who are interested in co-owning a property. “We will help facilitate the purchase, organise the finances and most importantly, get the legal agreement in check that helps to protect the co-owners.”
"We believe the co-ownership segment will grow and potentially can help bring first homebuyer rates back to the levels they were in in the past.”
So long as homeownership is a desirable investment, the property prices in Australia will be seemingly out of reach for some segments. “We’re seeing first homebuyer rates fall from 25 percent of property purchases in 2009, to just 10 percent of purchases now. Co-ownership needs to be a consideration for these people, so that they don’t miss out on the rising tide of property prices,” says Littin.
“Fractional ownership models like Domacom and BrickX are gaining popularity in Australia, but we think coHome comes at it from a different angle as it still enables the owners to live in the property and experience the feeling of moving into your own home. We are also unsure if the fractional models really help, there is ample liquidity in property but not in fractional shares. We believe the co-ownership segment will grow and potentially can help bring first homebuyer rates back to the levels they were in in the past.”
Along with his business partner, Damian Horton, the founders of coHome have big plans up their sleeves. “We are very keen to leverage partnerships with likeminded companies. Currently, we are working closely with LawAdvisor, an exciting new startup that has launched out of Melbourne which connects lawyers and people — this is helping us with the legalities for coHome.”
The idea for coHome seemed like “a natural fit” for this demographic.
With the emergence of the sharing economy, and the increasing willingness of people to share assets (think Uber, Airbnb etc.), the idea for coHome seemed like “a natural fit” for this demographic, explains Littin. “Property in Australia has been the strongest asset class, and whether you own the whole asset or a half or a third, you can still get the advantages of owning, instead of not being in the market at all.”
We believe the co-ownership segment will grow and potentially can help bring first homebuyer rates back to the levels they were in in the past.”
With the emergence of the sharing economy and the increasing willingness of people to share assets (think Uber, Airbnb etc.), the idea for coHome seemed like “a natural fit” for this demographic.
Pauline is a Sydney-based journalist for Domain and is frequently featured amongst various Fairfax Media mastheads including The Sydney Morning Herald and The Age.