Rapidly increasing house prices in Australia’s capital cities is making it harder for young people to get onto the property ladder.
According to the Australian Bureau of Statistics, the proportion of Australian residents who own their own home has fallen significantly from 41.1% in 1991, down to 31% in 2016. And over the same period, the proportion of renters has grown from 26.9% to 30.9%.
Many people are choosing to invest as tenants in common, sharing the cost of entering the property market.
REIQ CEO, Antonia Mercorella, explained how tenants in common works.
“In Queensland there are commonly two main types of property ownership – tenants in common (TIC) or joint tenants (JT),” she said.
“Usually married couples own property as joint tenants.
“A tenants in common ownership arrangement can be established as a way to reflect the financial contribution of each party to the purchase.
Groups investing as tenants in common could be friends, siblings, workmates, or parents and children purchasing property together.
Ms Mercorella added there could be some complications to the arrangement.
“What happens to the property after one person dies is a key difference between tenants in common and joint tenants,” she said.
“Under TIC, if one person dies their share is passed to their heirs, rather than the surviving partner. Also under TIC, one partner can mortgage their share or even sell their share without the other person’s permission.
“But tenants in common can be a good way for groups to buy property together as long as everyone is aware of the potential outcomes at the beginning and is prepared for all eventualities.”

Ref: Your Investment Property