New Fintech Platform Housies Offers Home Ownership for $100

New Zealanders will soon have a new opportunity for property ownership, thanks to a fintech startup called Housies. Launched on October 19, 2023, this platform allows individuals to invest as little as $100 in residential properties through a model known as fractional investment. By lowering the entry point for investment, Housies aims to make home ownership accessible for people with limited funds.

The platform works by enabling investors to buy shares in a residential property. These investments yield returns from rental income and potential equity growth without requiring substantial deposits or mortgages. Housies operates under a Financial Market Authority (FMA) services license, a necessary step for crowdfunding property purchases in New Zealand.

Innovative Features Separate Housies from Previous Attempts

Housies differentiates itself from other property crowdfunding platforms that have previously struggled in New Zealand, such as The Property Crowd and The Ownery. According to James Jordan, the Chief Executive of Tressel Limited, the company behind Housies, the platform incorporates a unique feature. One of the investors, designated as a “guardian,” will actually live in the property. This arrangement fosters a sense of care and responsibility for the home, as opposed to having it solely rented out.

Investors who own a minimum of 2% of the property can apply to become the guardian. If selected, they pay a 4% occupation license fee on the portion they do not own. This fee will cover rates and insurance while contributing to a maintenance fund for long-term upkeep of the property. Jordan emphasized this model as a comprehensive solution designed to help more New Zealanders enter the housing market.

Another notable feature is the platform’s secondary marketplace, allowing investors to sell their shares at any time. Jordan believes Housies is the first platform in New Zealand to gain approval for such a market. He noted that while liquidity is not as high as in stock exchanges, it still provides a more accessible option compared to traditional home sales, which can be slow.

Market Response and Future Prospects

Housies has begun its operations with eight newly available properties in Auckland and plans to expand to other major centers. Jordan stated that as the platform grows, the number of properties available for investment will increase. Initial sales may take a few months, but the team hopes to have made significant progress by the end of the year.

The interest from potential investors has been promising. During a preliminary test campaign last year, over 9,000 people registered, and the platform received 130 property offers. Following a soft launch with approximately 8,600 individuals, 44% of those who completed the anti-money-laundering process chose to invest in shares.

Looking ahead, Housies plans to distribute dividends to investors on a quarterly basis. Guardians will have the option to purchase the property they occupy after attaining a 75% shareholding. This aspect could appeal particularly to retirees looking for alternatives to reverse mortgages.

Jordan and his co-founders, including Ricky Jack, Paul Sadler, and Simon Whyte, developed Housies after recognizing the challenges many face in accessing the traditional housing market. With 512,500 households in New Zealand priced out of home ownership according to Stats NZ, the platform aims to provide a flexible pathway into property investment.

The previous attempts at property crowdfunding in New Zealand have often faced hurdles. For example, The Ownery failed to generate sufficient investor interest in its first offering in 2016, while the FMA suspended The Property Crowd’s crowdfunding license in 2022 for failing to meet obligations. Despite these challenges, Housies presents a new opportunity for aspiring homeowners and investors alike, potentially transforming the landscape of property ownership in New Zealand.