The Challenge: High Costs, Low Entry Points
With the Australian property market proving increasingly difficult to penetrate, many aspiring homeowners, particularly first-time buyers, find themselves priced out due to prohibitively high upfront costs.
The Solution: Shared Equity, Low Deposit
Under this pioneering model, prospective buyers can now acquire up to 80% of a property’s value with just a 20% investment upfront. This means individuals can enter the property market with as little as $20,000. Crucially, participants in this scheme also pay rent equivalent to 6% of their share, providing a manageable ongoing financial commitment.
Darren Younger, CEO of Bricklet, highlighted the transformative impact of this approach, stating, “Helping people achieve homeownership is always amazing, and this helps people get to the home because of the low deposit.”
How It Works: Shared Returns
When the time comes to sell, the property is assessed, and the proceeds are divided proportionally. Investors recoup their initial share of the property’s value, while homeowners retain the remaining equity. This ensures that both parties benefit from the property’s appreciation over time.
Impact and Future Prospects
The partnership between AMP and Bricklet marks a significant step towards making the great Australian dream of owning a home more accessible. By pioneering a shared liquidity program, they aim to empower a new generation of homeowners and inject dynamism into the property market landscape.
As the initiative gains momentum, it promises to not only provide financial flexibility to buyers but also foster a more inclusive approach to property ownership. This collaborative effort between a major financial institution and an innovative start-up sets a promising precedent for future developments in the industry.
In conclusion, AMP and Bricklet’s shared equity model represents a paradigm shift in property ownership, offering a viable alternative for those looking to enter the market without traditional financial constraints. With aspirations set high and barriers lowered, this initiative stands poised to reshape the Australian property landscape for years to come.