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Company offers 'new path for Kiwis to get on property ladder'

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Fuseworks Media
Fuseworks Media

An innovative New Zealand company, The Ownery Limited, is set to offer a new way for Kiwis to build up a stake in the housing market.

Savers can effectively become part owners of carefully selected Auckland houses and get a foot on the property ladder starting with as little as $500.

The value of savings at any time will be directly linked to the value of the house, or houses in which they have chosen to save in.

Paul Jacobs, CEO of The Ownery, says younger Aucklanders in particular are facing an uphill battle trying to save for a deposit, with house values rising much faster than available interest rates or increases in incomes.

"This is making it more and more difficult for younger Kiwis to keep their dream of home ownership alive, as the median price for a house in Auckland edges towards $1 million and banks require minimum deposits."

"There is, of course, no guarantee about what the future will bring, but regardless, The Ownery’s approach ties the value of savings to the everchanging values of Auckland houses", says Paul.

"Owners can increase their stake in the market over time as and when they have the funds available and will be able to save in the sort of houses that they aspire to buy as their first home"

Companies will publish their offers for shares on The Ownery’s website, giving savers the opportunity to buy shares in companies that own and manage a single property. These shares are referred to as HouseShares. The Ownery will charge savers an upfront fee at the time HouseShares are purchased.

Each HouseShare offer will be regulated by the New Zealand Financial Markets Authority under the Financial Markets Conduct Act, 2013.

Each HouseShare Company will appoint a professional manager to provide administration services and to select and manage its property. An annual fee based on the value of the property will be charged for these services. These fees will be deducted from net rentals along with rates, insurance, maintenance and other costs. Any surplus can be returned to shareholders as a dividend.

Shareholders will receive an updated share valuation every month based on QV data and twice a year based on a full registered valuation. Shareholders have the right to request their HouseShare Company to buy their shares at their latest valuation at any time. There will be no exit fee.

Bank loans will not be used by HouseShare companies to purchase their houses but there will be provision for low level borrowing as needed.

Paul Jacobs and cofounder Kurt Settle have worked closely with property experts Jones Lang LaSalle to fully understand what has been happening in the Auckland housing market, and the law firm Wynn Williams in putting the concept together.

Kurt and Paul are Kiwis returning to New Zealand after careers in Hedge Funds and IT/Banking respectively. They have observed at first hand the difficulties faced by prospective home owners in strongly fluctuating residential housing markets in other countries. The Ownery is their solution designed for Kiwis to overcome these difficulties and get onto the property ladder earlier.

The Ownery has offices at Smales Farm in Takapuna, but is positioned to provide its services over the internet at through a custom built website.

"This is the way most of our target market will want to interact with us, make transactions, receive information and have their questions answered," says The Ownery’s marketing expert Jocelyn Bray.

"We have worked hard to stay in touch with our target market during the development of our offering. I have personally talked to a wide range of people out there, and I have seen and felt the frustration and disillusionment first hand.

"We see strong interest in the concept amongst those saving for their first home and in parents wanting to put some money aside to help their kids when the time comes for them to buy their own home. Also, long term renters and Kiwis with plans to return to New Zealand see value in saving in Auckland houses"

"It is not a magic bullet," says Paul. "You have to be really disciplined about your savings programme over time to build a deposit. But if home ownership is the goal, it surely makes sense to have your savings affected by the same forces that are affecting the value of the home you are saving for. We believe the Ownery’s offering makes that possible in a planned way for the first time. It enables savers to save in houses "

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