A growing global trend, dubbed ‘houses before spouses,’ is seeing more young buyers opting to purchase property before getting married or buying jointly with a spouse or partner.
Source: Supplied. Grant Smee, chief executive officer of Only Realty Property Group.
This same trend has been mirrored in South Africa where, according to ooba Home Loans, the number of property purchases made with a spouse has dropped from 34% to 27% over the past decade. At the same time, the share of first-time homebuyers without dependents has increased to 64%.
While some buyers still opt for joint purchases, many are turning to an alternative co-ownership model as Grant Smee, chief executive officer of Only Realty Property Group explains: “It’s becoming increasingly apparent that, to navigate the financial challenges of homeownership, many Gen Z and millennial buyers are choosing to co-own property with friends or family, rather than relying on the financial security of a spouse.”
Smee adds that first-time buyers, who are opting to purchase properties alone, are also getting older - a trend driven largely by economic uncertainty, high unemployment rates and financial instability.
When it comes to ‘houses before spouses’ in the global context, the US leads the charge with single women owning approximately 2.72 million more homes than single men (New York Post). In the UK, solo households now make up a third of all households, according to the Urban Institute. Similarly, in Australia, the trend is gaining traction among younger generations.
Houses before spouses still trending locally
Smee notes that, for many, owning a home remains one of life’s most significant achievements: “For younger buyers, homeownership is still seen as a major aspiration - particularly in a challenging economic environment where saving for a deposit, securing a home loan, and ultimately purchasing a property are far from easy. That’s why, more often than not, it takes precedence over other traditional life milestones.”
Data presented by FNB indicates that buyers earning between R3,500 and R29,600 per month – referred to as the ‘affordable housing segment’ – are increasingly purchasing homes collectively to manage high interest rates and rising costs.
“This segment saw 47% of home loans issued in Gauteng over the past four years, 18% issued in the Western Cape (despite having the highest property prices in the country overall), and 12% issued in KwaZulu Natal – as per Standard Bank’s most recent data.”
Women are in strong support of the ‘houses before spouses’ trend, with Lightstone data in July 2024 reflecting that women own nearly 60% of South Africa’s residential housing stock. “Female first-time buyers now outnumber their male counterparts, with the majority being single or divorced.”
Tips for navigating the joint ownership journey
As the trend continues to grow in popularity, Smee believes that more millennials and Gen Zs – in particular – will choose to purchase jointly.
“Housing affordability remains a challenge and this is where joint homeownership comes in. It also helps to minimise and spread risk across the parties entering the agreement, however, buyers must understand the legal, financial and practical implications.”
He unpacks these as follows:
- Managing financial risks: A major risk of joint ownership is that if one owner stops contributing financially, the remaining owners must cover their share to avoid legal and financial consequences.
“This is why a well-drafted co-ownership agreement is essential,” says Smee. “It should outline how costs are divided and establish solutions for non-payment, such as a buyout clause or forced sale options.”
- Steps to take in the case of death: In the event of a co-owner’s death, their share does not automatically transfer to the surviving owners.
“The share becomes part of the deceased’s estate and is distributed according to their will or intestate succession laws,” explains Smee. “Meanwhile, the remaining bondholders remain jointly liable for loan repayments until the estate is settled and ownership is transferred.”
Smee advises co-owners to maintain up-to-date wills to avoid legal complications.
- Exiting the agreement: If disputes arise over selling the property - such as one owner wanting to sell while others do not - an owner can apply to the court for an order to force a sale, known as actio communi dividundo.
“A co-owner could also attempt to sell their share without the consent of the others, which may introduce an unknown third party into the arrangement,” Smee cautions. “A buyout agreement can help prevent such conflicts by ensuring that remaining owners have the first option to purchase the departing party’s share.”
If all owners agree to sell, the property is sold, and proceeds are divided according to ownership percentages.
- The importance of a co-ownership agreement: A formal co-ownership agreement should outline ownership rights and obligations, procedures for selling or transferring shares and recourse for non-payment.
Looking ahead, Smee believes that Gen Zs in particular will change the way in which property is viewed, purchased and ultimately, used.
“While millennials have been largely responsible for driving this trend, I suspect that Gen Zs will transform the homeownership landscape in years to come. Whether it’s through joint or single homeownership, we do anticipate it to be an exciting time.”
