A new housing model will be launching in Australia that aims to help overcome affordability hurdles facing many new homebuyers.
Lease-to-own platform Ownlea will let users rent from a selection of properties with the option of buying the dwelling within a five-year window – all the while capturing a portion of any capital gain from their residence.
Ownlea is being developed by James Alexander-Hatziplis, the co-founder and chief executive of Place Studio, a leading architectural practice that’s been responsible for the delivery of $3.5 billion in mixed-use projects.
“It’s one of the largest, if not the largest, delivery architects in NSW for property developers,” Mr Alexander-Hatziplis said of Place Studio, explaining a delivery architect does the unglamorous work of steering another firm’s initial plans through to completion.
“We service about 60 to 70 of those large developers and so we have a really intimate understanding of what their fundamental problems are.”
Many are sitting on development plans that have been approved, but they don’t have the financing to begin construction, Mr Alexander-Hatziplis said.
By working with developers, Ownlea controls the housing stock on its site and by cutting out intermediaries, Mr Alexander-Hatziplis says the platform will be able to make housing more affordable.
The platform will offer “lease to own” solutions in which potential homebuyers who haven’t saved enough for a down payment can commit to a five-year rental agreement that gives them the ability – but not the obligation – to buy the property at any time during that window.
“If you want to get in a million-dollar property traditionally, you’re looking for $200,000, $250,000 to be able to do that,” he said.
“The equivalent model for us, we only need $24,000.”
Mr Alexander-Hatziplis compared it to Toyota’s financial department financing the vehicles it has sold after building them in its factories. By having some control over the asset’s production, Ownlea is able to sell it more cheaply, he says.
But Owlea is also different from a traditional vendor financing model, because potential homebuyers are not locked into buy a property.
Tenants will pay regular rent and are given the option to pay more to build equity towards a down payment, but there’s no pressure to do, Mr Alexander-Hatziplis said.
If the property market increases during the five-year agreement, the purchase price increases, but not as much as the overall market, Mr Alexander-Hatziplis said.
In essence, the capital gain is split between the developer and the renter.
The platform has agreements with over 3500 apartments, but is targeting moe than 10,000 dwellings a year in NSW, Mr Alexander-Hatziplis said.
The platform will go live for public browsing in the second quarter.
Ownlea | AM
Lease-to-own model targets young homebuyers
By: Derek Rose
Location: Sydney
Source: AAP
Image: Lukas Coch
