Good intentioned investors keen to hack the housing market can now start their portfolio for the price of a new small car, while simultaneously supporting the affordable housing sector.
Lakeba fragmented property platform, Bricklet, which gives buyers the opportunity to buy a share of an individual property, has partnered with Evolve Housing in an effort to increase investment in affordable accommodation for low-income earners. The partnership will launch with an 18-townhouse project in Rydalmere where each home consists of “bricklets” at $21,400.
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First-time buyer Rhys Richards said Bricklet investing was a way to get onto the property ladder sooner, rather than later. “I’ve always been interested in property, but saving for a deposit has just been getting harder,” the 39-year-old said.
“This is my first step into the market and it seemed like a good way to put my money into something and have the property managed by someone else. It would have been another five years or so of saving if I’d bought the traditional way.”
While such micro-investing platforms are open to all investors, Bricklet CEO Darren Younger said it particularly appealed to first-time purchasers.
“If you look at where interest rates are and where they’re going to be over the next 12 months, it actually creates a negative position for someone trying to save a deposit,” he said. “When your money is in the bank instead of in property then it’s the capital growth you miss out on.
If the market goes up 10 per cent during the time you’re trying to save, where does that leave you? Whereas, if you’ve got the first $20,000 saved up and the opportunity to use it, then you can start building a portfolio of Bricklets until that portfolio is big enough to act as your deposit on a home,” he said.
Mr Richards said the social aspect of buying into the Rydalmere development appealed to him. “I liked the idea that this project would be used for affordable housing because I know there will be that long-term security of having a tenant. It might not be getting the highest of rents for that particular property, but potentially having someone in there for the long haul means I won’t have to worry,” he said.
Mr Younger said the prospect of long-term tenancy was a drawcard for Sydney investors who might have been spooked by recent reports of soaring vacancy rates.
“Post-covid, occupancy rates are becoming more important than the rent. Also, affordable housing has waiting lists, which means you’re close to 100 per cent occupancy the whole time. If someone moves out there’s a good chance there are people waiting to move straight in. And they’re new properties that are well looked after. Nobody wants to get kicked out and have to get back on the wait list,” he said.
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