Three alternative pathways to home ownership


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Australia has a housing problem. That's nothing new, but the laundry list of issues contributing to the broader problem seems to be growing every year.

Take the cost of property for one.

The country's median home price is now $925,000, and the time needed to build up a deposit to purchase a typical property on a median income has ballooned from six years in 1994 to 14 years in 2023, according to the Australian Housing and Urban Research Institute.

nightingale housing
Nightingale Housing has delivered more than 500 homes in Adelaide, Ballarat, Melbourne and Perth. Photo: Supplied.

Even if you do manage to purchase a property using the traditional routes - home and land packages, off-the-plan apartments - stories abound of significant delays, shoddy buildings and construction company collapses.

There are bright spots amid the gloom, though. Here are three innovative ideas that could help people live in more affordable, more sustainable and better-built homes.

1. Smaller footprint

While necessity is the mother of invention, in some cases, frustration can be the source of innovation. In this case, the frustration came from a group of architects who were tired of designing apartments purely for investment rather than as homes for people to live in.

The solution was Nightingale Housing. For the past decade, Nightingale's mission has been to design and oversee the construction of housing that prioritises sustainability, community and affordability.

"We are trying to reorient the discussion and show people what is possible in terms of living close together, living in smaller-footprint homes and showing people that it's possible to live a fantastic life at any stage in an apartment," explains Dan McKenna, Nightingale Housing's chief executive.

So far, Nightingale has delivered more than 500 homes - mostly apartments - in Adelaide, Ballarat, Melbourne and Perth, with hundreds more in the pipeline.

As a not-for-profit, Nightingale is nothing like traditional developers. First, homes are sold at cost, and 20% are set aside for community housing providers and a further 20% for 'key community contributors' such as teachers and firefighters.

"Typically, with any sort of real estate, it's a matter of highest bidder wins, but we've always seen that as fundamentally flawed. So, because, historically, we've always been oversubscribed, we invite people to enter a ballot and literally draw them out one by one from a hard hat," says McKenna.

Until recently, Nightingale has focused on building homes for people to buy, but a project developed with Fresh Hope Communities in the Sydney suburb of Marrickville is about to deliver the Nightingale model to renters, with units available for rent at 20% below market value.

"We think this [rental model] is another angle to look at the housing crisis. It is scalable and replicable, because there's so much underutilised land in incredibly well-serviced locations like Marrickville that we think could be working so much harder," says McKenna.

2. 3D-printed houses 

A major issue behind Australia's housing problem is a lack of supply, but the reality is that building new dwellings takes a lot of time and labour. For example, the Australian Bureau of Statistics found it took an average of six to seven months to complete a house between 2008 and 2019.

But what if technology could speed up that timeframe while making the process cheaper and more sustainable? That's what the Melbourne-based 3D-printing company Luyten aims to achieve.

Chief executive Ahmed Mahil says Luyten's 3D-printers can roll out a home in weeks rather than months using its proprietary mixture, called Ultimatecrete, which not only delivers a better strength-to-weight ratio than normal concrete, it uses less cement.

"Instead of having a group of different tradespeople on site for a prolonged period of time, we have one robot and three highly skilled technicians: two to run the printer and one to run a silo that has the materials," he explains.

"The printer has an accuracy of 100 microns, which is better than a heart surgeon, but it still allows for delivery speed," says Mahil.

"That precision also means that all the cutouts and fittings will be there ready for the plumber and the electrician, so there's no added waste with things having to be redone. That way we reduce the waste that comes out of this industry, and we reduce the time to deliver a house, which tackles one of the biggest problems right now with housing supply and cost."

And unlike other 3D-printers used overseas, Mahil says Luyten has developed its technology in Australia with Australian building sites and mobility in mind.

"You'll see some machines overseas where you literally have to build a warehouse above your house to build a house, but ours is the only one designed for a construction site because it works on wheels."

3. Lease-to-own model

There's been a steady stream of government and private sector initiatives popping up in recent years to assist first home buyers looking to enter the market.

Many of these buyers are renters, who have been watching deposit requirements increase at the same time as their rents have risen at double-digit annual growth rates.

James Alexander-Hatziplis, chief executive of architectural firm Place Studio, is one person who has been thinking a lot about how more renters can afford to transition into becoming homeowners.

That's why he has developed a new lease-to-own model called Ownlea, which he describes as a gradual on-ramp from renting to ownership.

The Ownlea platform shows prospective buyers pre-vetted properties within their budgets, which they can then rent for a set five years. During that period they will be required to pay rent, but they'll be able make improvements to the interior like an owner and build up equity in the home.

"There's a set base cost [rent] which is predetermined over five years. So, from day one you'll know how much rent will be on year one, year two, etc. It's not impacted by interest rate changes and it's inclusive of utilities, strata and any maintenance required," says Alexander-Hatziplis.

"Then we provide the ability for someone to tailor how quickly they want to build equity in the property. That can be putting in 1%, 2%, 3% or 4% equity each year, or it could be zero, as in 'Maybe I'll be able to build equity through capital gains'."

Once a buyer has built up enough equity, they'll be given the option to purchase the property.

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Tom Watson is a senior journalist at Money magazine, and one of the hosts of the Friends With Money podcast. He's previously worked as a journalist covering everything from property and consumer banking to financial technology. Tom has a Bachelor of Communication (Journalism) from the University of Technology, Sydney.