We have led OwnHome’s AUD$31m Series A round, joining co-CEOs Tim and James on their mission to turn renters into homeowners. This round included contributions from The Commonwealth Bank via X15, as well as other existing investors including GFC, Entrée Capital, AfterWork, and Possible Ventures.
Read the coverage in the Financial Review.
The Problem:
Access to homeownership is a serious and growing problem in Australia, as it is in many countries worldwide.
Homeownership is a critical tenant of the Great Australian Dream, yet it escapes more Australians each year through no fault of their own.
Housing is increasingly unaffordable:
- In the 1990s, it took six years to save a 20% deposit for the average home; today, it takes ten years
- Over the last 50 years, deposit requirements have increased 40x, while real wages have increased by <2x
- The average number of years in the workforce before purchasing a home has increased from 2 years to 12
- In Sydney over the last ten months alone, median property prices have risen by A$300k to A$1.3m, meaning the median property became $1000 more expensive with each passing day (ABC)
Homeownership in Australia has been declining for three decades, and increasingly young and low-income people are locked out of the property market. The trend is driven by a decline in initiatives to boost housing supply (versus post-WWII) and an increase in demand driven by pro-investment policies and attempts to increase first home purchases through subsidies.
Contrary to popular belief, young people in Australia save more than their counterparts 50 years ago and spend less on restaurants and alcohol (The Guardian), and yet the property market rises faster than they can save. For those who are joining the market as a first-time homeowner, an increasing percentage, up to 60% in March 2021, received financial help from the Bank of Mum and Dad or family members (ABC). At this rate, almost half of all retirees in Australia will be renters in 40 years’ time (Grattan Institute).
The role of homeownership is important—as it not only offers financial benefits to homeowners (tax, a hedge against property value increases) but there is evidence that homeownership creates stronger communities and encourages investment in local amenities and social capital (Journal of Urban Economics).
For those with the aspiration to become homeowners, pathways are in short supply. This is the case for many high-earning young Australians, who can service a mortgage but do not have the savings to pay the high upfront costs of purchasing a home (deposits, stamp duty, etc). With growth in house valuations and deposit sizes outstripping wages growth, the traditional approach of saving for a deposit and then purchasing a property will not empower them to buy a home.
This is where OwnHome comes in.
What is OwnHome?
Founded in March 2021 OwnHome is Australia’s fastest-growing rent-to-buy platform helping Australians get into their home and onto the property ladder. On a mission to turn renters into homeowners, OwnHome delivers a certain, equitable path to homeownership for creditworthy, aspiring homeowners who do not yet have a sufficient deposit saved. Requiring a 2.5% initial contribution, OwnHome provides a smarter path to homeownership that allows customers to build a deposit toward their home, while they live in it, with a locked-in purchase price.
How it works:
- Step 1: Apply – the future-homeowner fills out an application to discover their buying power
- Step 2: Choose Home – the future homeowner chooses their home, which OwnHome purchases. The future homeowners move in on a rent-to-buy contract
- Step 3: Start Saving — The homeowner pays rent each month, a portion of which builds equity in their home.
- Step 4: Buy Home – When ready, customers can buy their property outright at any time between 3-7 years at a pre-agreed price.
At this point, homeowners legally own the home they live in, and can refinance with any mortgage provider of their choice. If they decide not to purchase the home, they’re paid out of their equity in the home, less fees.
Since launching the service in October 2021, OwnHome has quickly helped 9 families buy their dream home.
Meet The Team:
Tim Harley – Co-CEO
Tim Harley is Co-Founder and Co-CEO of OwnHome. With a heavy focus on product and customers, Tim is the powerhouse behind the operational side of the business. Tim worked as a Paralegal for Herbert Smith Freehills during his time at the University of Sydney. After graduating, Tim gained experience in private equity working in the Real Estate Banking team at Macquarie Capital. Before co-founding OwnHome with James, Tim was the Head of Middle East at London-based fintech, Wise. Bringing a wide-ranging skillset and passion for helping others, Tim co-founded OwnHome.
James Bowe – Co-CEO
James Bowe is Co-Founder and Co-CEO of OwnHome. Prior to OwnHome, James was a senior manager at Bain & Co based in San Francisco, London & Sydney. James has also led teams for the world’s leading hedge fund, growth and venture investors. With a focus on debt & equity and strategic partnerships, James’ is centred around external stakeholders. James holds a Bachelor of Laws and B.A from the University of Sydney.
Where to now?
The team are building towards a service where they service all first home buyers across Australia, inclusive of all demographics and socioeconomic status.
This fundraise empowers the team to launch OwnHome into the Greater Sydney housing market, and we’re delighted to be joining the team at this early stage.
Learn more about OwnHome.
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