Savvy first homebuyers are finding creative ways to land a foot on the property ladder as prices skyrocket

First homebuyers have been coming up with creative ways to land a foot on the property ladder, including one clever and increasingly popular tactic that’s also risky.

Forget housemates – unaffordable property prices have led to the emergence of “mortgage mates”.

Home seekers are increasingly joining forces with friends or siblings to purchase homes, with a quarter of Aussies claiming they’ve considered this option, according to Commonwealth Bank research.

It comes as national property prices surged over the past year at the fastest rate since the 1980s, while first homebuyer activity has been falling since February.

Over two-thirds of those who explored the option of buying with a ‘non-traditional’ partner, including a parent, said unaffordable property prices were the main driver.

Others wanted a bigger or better property and to spread the financial burden if anything went wrong.

Erin Howell 23, and brother Ryan, 21, bought an investment together. Picture: Tim Hunter.

This was despite the significant risks of co-ownership. Friends splitting mortgages were usually committed to being tied together financially for years, often with the requirement of bailing out the other if they couldn’t meet their loan obligations.

Some of the mates sharing mortgages said they would never have contemplated these measures if prices were lower and it was possible to purchase without relying on someone else.

Commonwealth Bank’s home buying manager Michael Baumann said recent property price rises were making it challenging for first homebuyers to enter the market.

Many had to resort to new buying tactics and shared ownership was becoming popular because it allowed for more flexibility, Mr Baumann said.

“It’s a way to get on the property ladder faster,” he said, adding that many buyers felt pressured to buy quickly before prices increased again.

Mr Baumann warned there was a downside to some of these arrangements as sharing mortgage costs without a defined legal structure was a financial gamble.

Many Millennials said they felt pressure to buy quickly and splitting mortgage costs helped them purchase faster. Picture: David Swift

Entrepreneur Ayumi Uyeda, founder of mortgage sharing platform Proppie, said there needed to be conversations about how costs would be split and what would happen if one party needed to sell.

“The smart way to do this is with a contract upfront, but there is often hesitancy to have this conversation because it implies you don’t trust each other,” Ms Uyeda said.

Research commissioned by Proppie showed Millennials were particularly keen to split mortgage costs, with 48 per cent of those polled claiming they’d consider it without a legal framework. The interest level among Millennials rose to 78 per cent if there was a defined structure for how the equity, repayments and upfront costs would be split.

Ms Uyeda said Millennials, particularly on the eastern seaboard, usually needed help with upfront costs. “Money has never been cheaper to borrow, but coming up with a deposit is where they usually struggle the most,” she said.

Erin Howell, 23, decided to team up with brother Ryan, 21, to buy a property in Sydney suburb Penrith and said they got a better home than they would have got purchasing separately.

The brother and sister duo worked out a plan for how to split the home if they needed to sell. Picture: Tim Hunter.

They used Property Share, a Commonwealth Bank feature allowing them to keep their finances and repayments separate, and she pays him rent to stay in the property while he lives with their parents.

“I was looking to buy for about three years, but none of the properties I saw felt right,” Ms Howell said. “We realised if we did it together we could get a four-bedroom townhouse rather than a small unit, so it was a great opportunity for us. It’s purely an investment for him.”

Ms Howell said they had to have an open conversation about the structure. “We split it 50/50 and decided we would need to discuss if one needed to sell. We trust each other.”