Top Trends in Alternative Real Estate Buying in Australia
Would you consider yourself traditional? What about when it comes to real estate buying?
In a market where skyrocketing prices and shifting lifestyles are redefining the dream of homeownership, innovative solutions are emerging that challenge traditional notions of property buying in Australia.
Why would you be so traditional when there are so many other ways to own!
Let’s have a look at some of the top trends in alternative real estate buying, along with examples of companies leading the way in Australia.
1. Co-Ownership Models
One of the most significant shifts in the Australian property market is the rise of co-ownership models. This trend allows multiple individuals to collectively purchase a property, making homeownership more accessible, especially for first-time buyers.
For obvious reasons, we love this model. Buy 1/8th or 1/6th, own the underlying asset, enjoy creating amazing memories with loved ones and friends and let us take care of the rest!
There are tons of cool companies that have been leading the charge in co-ownership for years. Take a look at Pacaso in the U.S. and Fractal in London.
Faction, our platform, is a notable platform facilitating this process, providing legal frameworks and management services that simplify the co-ownership experience. By sharing the financial burden, buyers can invest in properties they might not have been able to afford individually, effectively democratising access to real estate.
2. Rent-to-Own Arrangements
Rent-to-own schemes are becoming increasingly popular in Australia, particularly as rising housing prices make traditional homeownership challenging. In this arrangement, tenants have the option to rent a property with the potential to purchase it later.
Assemble Communities is an interesting one. The Assemble initiative is a twist on the build-to-rent model, in which developers build residential apartment buildings. Instead of selling the buildings off as investments to a pension fund, they are sold to the residents.
Mirvac have created the Liv brand - in the build to rent space - which is interesting and worth checking out. They claim to be a lifestyle brand focused on delivering the flexibility of renting with the security of home ownership.
4. Build-to-Rent Developments
The build-to-rent model is gaining traction in Australia as developers shift focus from selling properties to renting them out long-term.
According to a recent report from JLL, currently there are only 4,340 Build-to-Rent apartments in operation nationally but the future is rosy with a further 8914 Build-to-Rent apartments under construction, and 6862 apartments which have received development approval but are yet to commence development. The pipeline will continue to grow, with an additional 16,269, Build-to-Rent apartments proposed or in planning.
This approach caters to the growing demand for rental housing, particularly in urban areas where housing affordability is a concern.
Cedar Woods Properties is leading the way in build-to-rent developments, creating purpose-built rental properties designed to provide high-quality amenities and services for tenants. This model not only provides more stable rental options but also contributes to the creation of vibrant, community-focused living environments.
5. Fractional
BrickX allows individuals to purchase "bricks," or shares, in a property rather than buying an entire home, providing an accessible entry point for investors looking to get involved in the property market without committing to the full cost of ownership. This model is particularly appealing for those seeking to diversify their portfolios or invest in real estate with a smaller financial outlay. Usuall
Conclusion
The Australian real estate market is undergoing a transformation, with alternative buying methods gaining popularity among buyers seeking innovative solutions to traditional challenges.
From co-ownership to rent-to-own arrangements, build-to-rent developments, and community land trusts, these trends are making homeownership more accessible and flexible. As sustainability and community-focused living continue to shape buyer preferences, the future of real estate in Australia looks promising, reflecting the changing needs and values of its population.
By staying attuned to these trends and the companies driving them, buyers and investors can navigate this dynamic landscape effectively, unlocking new opportunities in the evolving world of real estate.