New research by Finder suggests that Australian couples are accelerating their cohabitation plans to alleviate financial stress.
A survey of 441 renters conducted by Finder revealed that 15% of couples have moved in together earlier than intended.
Of this group, 10% decided to cohabit earlier than planned to cope with the escalating cost of rent, which equates to more than 290,000 households.
| Have you moved in with a partner earlier than you expected? | |
| No | 45% |
| No, I don’t have a partner | 39% |
| Yes, to make rent more affordable | 10% |
| Yes, to improve my chances of rental or home loan approval | 3% |
| Yes, for another reason | 2% |
| Source: Finder survey of 441 renters, March 2023 | |
The data also indicates that 3% of respondents moved in together to increase their chances of securing a rental or home loan, while 2% chose to cohabit for other reasons.
Sarah Megginson, a money expert at Finder, said the cost of living has forced many Australians – particularly young people – to make some tough decisions:
“Rising costs are becoming a big concern for Australians, with many struggling to find affordable housing.
It’s not surprising to see this rental crunch is prompting some people to turn to alternative living situations to cut down on expenses.”
Cohabitation for convenience
According to the research by Finder, young Australians are more prone to accelerating their cohabitation plans, with 29% of Gen Z couples moving in together earlier than planned, compared to 17% of Millennials.
Financial experts have warned that this could be a "marriage of convenience" that may lead to issues if the relationship doesn't work out.
Megginson cautioned that this situation could turn sour quickly.
She commented:
“Lenders are really strict on lending money to borrowers if they don’t think you’ll be able to manage repayments – it’s baked into the responsible lending act, so they have a lot of guidelines to follow around how much they can responsibly lend to you.
Couples are more frequently pairing up to increase their chances of approval, but if the relationship goes south, it could be extremely complicated for individuals to part ways.”
The research revealed that women (19%) were more inclined than men (11%) to move in with their partners earlier than planned.
Megginson advised partners to have a good understanding of each other's financial habits before applying for a loan together.
She said:
“You probably won’t discuss debt on the first date!
But there needs to be an open discussion before things get serious.
Learn about how the person you’re dating manages debt and their money habits in general before you move in together.”
Furthermore, Megginson emphasized the importance of avoiding unpleasant surprises, such as finding out that your partner has a significant credit card debt or costly personal loan that affects their financial situation and complicates shared living expenses:
“It can be hard to reach financial goals as a couple if you have very different approaches to money management, which is why these conversations are so important.
Signing a lease or a mortgage is a huge step to take with a significant other, so don’t rush the arrangement just to reduce hip pocket pain."
Tips to save a deposit
- Develop a savings plan. Developing a realistic savings plan is a great way to start saving for a deposit. Work out how much money you need to save and then work out a budget. Work out how much money you can afford to put away each week and start building your balance.
- Make regular deposits. Set up a regular direct debit straight from your income into your savings account. This way, you’ll be saving money without realising it, but you can always add in extra lump sums if circumstances allow.
- Consider a high-interest savings account. Shop around for an online savings account that offers a great interest rate and minimal or no fees. You may also want to consider a term deposit so that your savings can earn a higher rate of interest.
- Cut back on expenses. If you work out a weekly budget, you should be able to find a few areas where you can cut back on expenses. Do you really need that gym membership you never use? Could you eat at home rather than dine out one night extra per week? You’d be surprised how much you can save once you put your mind to it.
- FHOG. If you’re saving for your first home, remember that states and territories around Australia offer a range of grants and concessions to first-time buyers. The First Home Owners Grant (FHOG) offers useful financial support to many first-home buyers, so check to see if you’re eligible.
