Of the multiple columns I read each day on housing affordability, it isn’t often that the rhetoric stretches beyond the fate of the First Home Buyer (FHB), and it rarely covers the wider network of services and products which rely on FHB’s achieving their goal of buying into a house. This stretches from the banks and mortgage brokers to the removalists.

It appears, more than ever, young people are having to rely on intergenerational wealth exchange in order to improve their financial situation, but I guess this is for the lucky few. With the older generation holding on to their assets during this unprecedented property boom, how will the younger generation afford housing in the future?

Maybe we need to start thinking about things differently, and move the conversation away from housing affordability to accessibility. After all, to solve for affordability, suggests that either a house becomes cheaper and thus more affordable, or an individual has more money so property at the current price seems more affordable. Given 65% of Australian wealth is tied up in property, with over 9 million dwellings owned by individuals and investors, a fall in house prices is not in the nation’s wider interest. So let’s conclude housing affordability is an issue, and will remain. Government can tinker, but no single policy is going to be unanimously popular, and thus will likely never happen.

What is solving for accessibility and why is this important? The Australian dream has moved on from owning a house on a quarter acre block – it’s now about owning your first house, and then working towards your investment property and further exposure. The bar has been moved, and we’re living in a nation of haves and have nots.

Today’s Millennials are amongst the most disillusioned – and rightly so. They may be getting a poor reputation with all the talk about smashed avo, but the concept of ever having enough money for a housing deposit, for the purposes of living in or even just investing, is daunting. In this information age, where the advice we get goes beyond reassuring words from our parents and friends, the case studies and hysteria about the demise of the FHB is self-fulfilling.

The award for the most frustrated goes to those who decided four years ago that they would start saving for a house in Sydney or Melbourne, and how a $60,000 deposit was needed for a $600,000 unit (not to mention the stamp duty and other acquisition costs). The years of sacrifice and disciplined saving in a high interest bank account, to finally have the funds, but fall 50% short of the funds you need in 2017 to buy that apartment or house you had identified four years previously.

So how are we going to solve for accessibility? How are we going to inject a bit of optimism and hope into the disillusioned, not just the Millennials, but for all those that consider themselves the have nots and have missed out on the returns of Australia’s best performing asset class over the last 10 and 20 years?

Enter the rise of Fintech.

And welcome the exposure of asset classes as never seen before.

Fintechs pride themselves on being nimble; agile. Democratisation is often their creed. Customers are their world, and they obsess about customer service and customer experience. It’s about making something that may have once been exclusive, more accessible to everyone. There’s no better way to do this than with the harnessing of technology.

But when it comes to access, this is where the concept of fractional property investment comes in. Fractional property investment has long been around through private syndicates and various clunky unlisted vehicles. It’s never really been an option open to everyone (retail investors) or at the very least accessible to everyone from an understanding point of view or ease of use.

BRICKX (www.brickx.com) allows Australians to be able to own a share in a property without the need to own the entire house by providing investors with the opportunity to access those aspirational, yet increasingly unaffordable, suburbs. The ability to be able to invest in line with the housing market, by buying Bricks (starting at under $100) allows them to be able to build an investment that moves with the underlying property market, rather than sitting in a high interest bank account. So if the property market continues to power along, so should the growth of the investment.

And what happens if the market retreats and the investment goes down in value (yes property doesn’t indefinitely go up)? Then one could argue, if you are investing in line with your absolute goal, then you are no further away from achieving your goal. With hindsight, it’s easy to call out the best performing type of investment over any chosen period, but doesn’t an inexpensive hedge to the property market make sense?

Saving for a home deposit or for the future still resonates with Millennials but they go about it in a different way. They’re looking for alternatives to grow their wealth.

Anthony Millet

CEO of BRICKX.

The opinions and beliefs expressed by the authors and forum participants as part of this communication do not necessarily reflect the opinions and beliefs of BrickX, BrickX Financial Services or other entities within the BrickX group.

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