14 Aug 2018
Despite ever higher property prices, the Australian dream of home ownership isn’t over yet, according to Kris Daff, managing director of hybrid build-to-rent property developer Assemble Communities.
While reams of paper are dedicated to millennials’ inability to access (or indifference to) the property market, Daff says alternate models are the key to ensuring the market will see new entrants for some time to come. Assemble offers one such alternative.
"We're definitely not convinced there are Australians out there resigned to being long-term renters.”
“There’s something that’s still deep in the Australian psychology that the concept of home ownership is important for financial stability and security.”
“We're definitely not convinced there are multi-generations of Australians out there... that have resigned themselves to be long-term renters,” he says on video.
ANZ Institutional executive director John Hudson concedes people from generation Y and beyond have struggled as the size of home deposits has grown rapidly.
“As property prices have increased, that 10 per cent deposit becomes a material number,” he says.
“[Then] to get the home loan you probably need 20 or 30 per cent. And 20 or 30 per cent now, of six hundred thousand dollars, is a lot of money.”
Assemble’s model, according to Daff, offers budding homeowners a five-year lease plan, at the conclusion of which the renters are able to buy the property for a contractually agreed price. The group also offers a not-for-profit “financial coaching” service open to all renters/potential buyers.
“We get them into a system which is opt-in for them,” he says. “They don't have to participate if they choose not to.”
The first test of the model is a $A60 million apartment tower project in Melbourne due to start construction in 2019.
“We've got over a thousand people registered to participate in the first project,” Daff says. “We're really confident this is going to be a model which has got some deep appeal.”
Hudson says the model has ANZ’s support.
“We think it's just a fair equitable way to help part of the community to get into home ownership,” he says.
You can watch the video above to find out more.
Nick Higginbottom is a bluenotes contributing editor at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
14 Aug 2018
13 Jul 2018