Despite the significant challenges faced by many individuals, particularly millennials, in investing in property in Australia, there is some encouraging news. Proptech advancements are opening up fresh and thrilling prospects for potential buyers. So, how exactly is proptech helping to bridge the gap for investors who are currently unable to access the Australian property market?
Fractional ownership
Fractional ownership in real estate involves multiple parties sharing ownership and risks of a property. This concept is gaining popularity in Australia, with startups like Point, Unison, SoFi, and BrickX leading the way. Investors can purchase a small stake in a trust that owns a property, allowing them to benefit from real estate investment without the burdens of sole ownership.
BrickX, the first Australian fractional property investment startup, was recently acquired by Thundering Herd, a venture capital and private equity firm with shareholders including NAB Ventures and Westpac. This acquisition will fund BrickX’s expansion into commercial real estate and increase their inventory. The company previously faced issues with a lack of available properties to divide and weak rental yields in Sydney. However, commercial property investments should provide higher yields.
Bricklet, another fractional ownership startup based in Adelaide, offers a different structure. Investors purchase “bricklets” and are registered against the title of the property, giving them direct ownership. While BrickX’s entry minimum is $70, Bricklet’s is $30,000, making it more suitable for sophisticated investors. The company started with six apartments on Sydney’s Northern Beaches and has plans to purchase 150 more. They are also developing a marketplace for bricklets to be traded between property investors. Overall, fractional ownership is a growing trend in Australian real estate investment, with several startups showing real promise.
Predictive suburb price startups
Tudi, an Australian startup, has gained significant attention for its use of artificial intelligence and machine learning to predict the next booming property markets. The two founders developed a predictive algorithm for their own property investment objectives, and now they’re making it available to others.
Tudi collects data from 15,000 suburbs and utilizes it to generate a list of “suburbs to watch.” The company provides a freemium service that allows users to access the hotspot algorithm for up to five suburbs. This enables interested individuals to test the platform before subscribing to premium, which provides unrestricted access to the algorithm and additional insights into suburb statistics.
Self-managed investment properties
Australia’s property management landscape is undergoing a transformation, and :Different is leading the charge. This innovative startup is revolutionizing property management by combining advanced technology with skilled property managers to offer a full-service experience.
With :Different, property owners pay a fixed fee of $100 per month, regardless of their property’s rental value. This fee structure helps minimize costs, as everyday tasks are automated, allowing property managers to focus on the people behind the properties. Additionally, both owners and tenants can access separate apps for a smoother, more convenient experience.
Currently, :Different manages properties worth $700 million, and it’s not difficult to see why they’ve garnered so much interest. The company aims to address the problems of traditional property management, which can be costly and burden managers with time-consuming paperwork.
:Different’s services are appealing, including a flat fee, guaranteed rent, and one year of free landlord insurance. Recently, the startup has partnered with AirTree, and exciting developments are sure to follow.
FINAL WORD
The world of property investment is being transformed by several innovative proptech solutions including fractional ownership, predictive suburb price startups, and self-managed investment property startups. With increasing funding and publicity, these new technologies are poised to revolutionize the way we invest in property. It will certainly be fascinating to observe their ascent and impact on the industry.
