Buying property with friends or family – John McGrath

Co-owning a home with a relative or friend is becoming increasingly popular, particularly for first home buyers and younger people, with this option offering a swifter, smoother journey to homeownership. And, I’m not talking about financial help from the Bank of Mum and Dad.

The latest data from NAB shows that joint home loans between friends and family members increased by more than 33% between August 2024 and July 2025. The highest growth was in Victoria (up 47%); South Australia (37%); and New South Wales (34%). Western Australia and Queensland’s joint home loan uptick was also high at 30% and 19% respectively.

I would only expect such growth to continue this year, as property prices continue to rise. Then, there’s our 4.1% cash rate, which the Reserve Bank of Australia (RBA) raised in both February and March this year – its first increases since November 2023 – and could do so again later in the year.

Home loans such as the Commonwealth Bank’s Property Share option, are helping to drive co-owner popularity even further. Property Share allows up to four relatives or friends, including investors, to buy a property and split the cost in any way they choose.

It also allows the group of buyers to retain individual control of their finances with the one property secured by each owner’s separate, preferred, loans. In this way, the co-owners are only responsible for their share of the mortgage.

But generally speaking, there are two different kinds of co-owner loan structures. While you may be able to switch from one to the other, if relationships suffer or other problems come up, both structures still ask co-owners to act as guarantors for each other, regardless of their stake or share size in the property. So, if one owner can’t make mortgage repayments, or similar, the other owners must do so on their behalf.

In a joint tenancy, each person owns an equal, or even, share of the property, and have a 100% stake in it. Co-owners need each other’s permission to sell their part of the home, as well as needing to check with them on any decisions regarding the house. If one owner dies, ownership is transferred to the remaining owners.

These points are key reasons why joint tenancy is popular with married couples and other de facto relationships.

Meanwhile, siblings and friends most often opt for tenancy-in-common loans, which offer co-owners the option of having either equal or unequal shares in the property. In this way, they may have different stakes in the home. For example, if someone only has 20% shares in the property, they will only own 20% of it.

Each person can transfer their share of home ownership to someone else, without asking permission from their other co-owners. And, if one owner dies, their stake in the property can be transferred to someone else.

Obviously, there are major benefits and disadvantages to both types of co-owner loans, and what’s right for one couple, or group of friends, may not work for another. Certainly, the most significant benefit to co-ownership loans is being able to own a home sooner, with a larger choice and budget as well as a lower deposit, and smaller mortgage repayments. Your future bills, including council rates, can also be shared with your co-owner.

But co-owners also need to remember that they are financially liable for the entire home’s mortgage and other debts, including property taxes. So, if you’re considering any kind of co-ownership, think about your emotional and financial relationships with these people.

It’s a great idea for co-owners to be long-term, trustworthy friends. But more importantly, these people should have similar goals and lifestyles to yours. You should also appreciate similar property styles, locations, and share the same renovation and management priorities. Finally, as with any type of home loan, you’ll need to look at exit strategies, legal issues, and tax implications, especially if you’re an investor.

If you examine these details first with your co-owners, you’ll have everything in train for a successful homeownership journey, much sooner than you might have thought possible.