Jennifer Burke

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Vicki Walker

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Justin Tullipan

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Property Investment Platforms – March 2018


Soaring house prices around much of the country in recent years, especially in our capital cities, combined with stagnant wages growth, have made the dream of owning a home a distant reality for many Australians, with first homebuyers struggling to get into the market.

To combat the problem, a number of fractional property investment platforms have sprung up, providing first time buyers with a leg up onto the property ladder.

BrickX and DomaCom emerged two years ago, enabling investors to buy a share of a home with as little as $100, and more recently another start-up, CoVESTA, arrived on the scene. For those with some money saved but not enough for a typical 20 per cent deposit, these companies provide an opportunity to get into the property market debt free, and often live in a property they co-own.

Through CoVESTA, buyers can choose a property and then pay a minimum of 5 per cent of the purchase price to start an invest-and-rent syndicate, either with friends and family or through the website, allowing them to live in the property. With a minimum investment of 1% of the purchase price, investors can begin to build a diversified property portfolio, from residential to commercial.

Once purchased by CoVESTA, the property is held in a trust for five years, during which time buyers can trade shares to other investors. After five years, investors vote to either retain or sell the property. DomaCom and BrickX offer more flexibility, with investors able to sell their shares or sell the property at any time so long as all investors are in agreement.

However, there is some hesitation towards these platforms with some experts believing that the restrictions on investors’ ability to make decisions about their investment requires some caution, especially as Australia’s house values are starting to drop and are predicted to shrink even further in many markets. If investors are relying on strong rental yields and capital growth in the short term, then falling prices could deliver poor, if any, return if other investors in a syndicate wanted to sell the property.

David Johnston, managing director of Property Planning Australia, says “You have to be in a position to hold that asset for seven to 10 years to allow compound interest to take effect and to ride out the property cycle because you can’t avoid the costs of getting in and out of property, particularly government taxes.”



Wellington is staring down the barrel of record rents, with a severe shortage of accommodation in the city and with rental prices now on a par with Auckland for the first time, many tenants are being forced to look beyond the central city.

Nigel Jeffries, head of Trade Me Property, noted that rents in the two cities reached a record median of $550 per week in January. Trade Me’s January figures also showed a 70 per cent drop in the number of available rental listings in Wellington in December 2017 compared with December 2016.

Jeffries commented, “Some traditionally quieter areas have taken off. Lower Hutt was the most popular area for Wellington tenants in January, with rental listings receiving an average of 16 inquiries in their first two days on-site. Upper Hutt was a close second with an average of 15 enquiries, whereas demand for rentals in central Wellington was lower with rentals receiving an average of 11 enquiries in the first two days of listing. Aro Valley and Te Aro got 16 and 12 enquiries on average in the first two days of a place being listed, while listings in Petone and Naenae had an average of 22 enquiries.”

The wider Wellington region’s median hit a record $500 per week in January, up 4.2 per cent year-on-year. Lower Hutt rents rose 13 per cent to an all-time high of $450 per week and Upper Hutt rents increased 2 per cent to $400 per week.

The Auckland region’s rental market began the year strongly with the median weekly rent hitting another record in January, up 3.8 per cent year-on-year to $540.

North Shore rents hit a record median of $585 per week and Franklin rents hit a median of $500 per week. Christchurch rents only rose 0.3 per cent between December and January to a median of $400 per week while Nelson rents rose to $410 per week.

The Trade Me data comes from an index based on properties rented in the month by managers and private landlords, with more than 11,000 properties rented each month.

On the sales front, year on year median prices attained across the country are almost universally down, though generally by small amounts, as is sales volume. In fact, the number of sales recorded in NZ during January according to some reports was 14% down on the previous year and Auckland down a massive 21%.


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