Destination: growth — CrowdProperty launches to help build Australia’s recovery
The UK’s leading specialist property lending platform CrowdProperty launched in Australia this month (May 2021). CrowdProperty is a marketplace / peer-to-peer lending platform offering developers access to fast, transparent funds, and investors a simple way to earn up to 7% p.a. target income return* on short term investments in property project loans.
After six years of proven success in the UK, CrowdProperty has:
- Lent over $183 million (£101m) to property developers
- Funded the construction of over 1,100 homes worth over $360 million (£199m)
- Delivered a 100 percent capital and interest payback to investors
Australia entered into its first recession in nearly 30 years in September 2020. While the next quarter’s growth figures were more positive, Federal Treasurer Josh Frydenberg said, “technically the recession is over, but the recovery is not”. CrowdProperty is in a unique position to assist in building on Australia’s economic recovery.
Risk vs reward
Australian savers now have over half a trillion dollars sitting in cash, while the official cash rate is expected to stay at record lows of 0.1 percent until 2024. Furthermore, December saw Australian household wealth rise 1.7 percent to $11,351 billion, according to the Australian Bureau of Statistics (ABS).
By focusing on funding quality, small-to-medium sized residential development project loans between $250k and $6m, and by giving investors up to a 7% p.a. target income return*, CrowdProperty can help Australia’s recovery one townhouse, duplex, boarding house, or unit at a time.
The small-to-medium property development sector accounts for five percent GDP and approximately 134,000 jobs in Australia2. It also supports other industries including manufacturing, mining, and transport. This is then multiplied in the economy as wages are spent on consumer goods and so on, resulting in a knock-on effect of almost three times the investment in the property sector ..
This means residential property construction is vital for both economic output and jobs, when compared to other industries, especially in an economic downturn.
Delivering what’s needed
Almost as soon as lockdown happened in Australia, the major banks turned off the very lending SME developers required to sustain prosperity and jobs. Federal and state governments have attempted to fill the void with HomeBuilder and other incentives.
What’s more, while migration numbers have been set back by the recent border closure, Australia requires tens of thousands of new homes to be built per year. The Grattan Institute released the study, Housing affordability: re-imagining the Australian dream^, recommending that more houses (50,000 p.a.) be built to ease home affordability. The report says “It’s been a perfect storm of rising incomes and falling interest rates, rapid migration, tax and welfare settings feeding demand, and planning rules restricting supply”.
Offering speed and ease of capital for a swift funding process, and a partnership with project development teams, CrowdProperty enables developers to focus on what they do best.
The founders of CrowdProperty knew the funding market for SME developers was broken. Capital was not getting to those developers who need it most and could use it best — small and mid-sized developers building out smaller parcels of land.
Because we live this market, we have managed to build the largest peer-to-peer specialist property development platform in the UK. Now we’re doing the same in Australia.
Your next steps
Get in touch if you’d like to find out more about funding your next property development project.
*Target returns, not forecast returns. For wholesale investors only. Terms, conditions and risks apply.
The CrowdProperty Investment Trust (the Trust) is an unregistered managed investment scheme. The Trust is only available to investors that are wholesale clients as defined in s761G of the Corporations Act 2001 (Cth).
Investors pledge their funds in the Trust which makes first mortgage secured loans to SME property developers.
Withdrawals can only be made when the Investor funds are in Cash Interests in the Trust. Refer to the Information Memorandum (IM) for more information.
CrowdProperty Pty Ltd (ACN 633 516 195) is the investment manager of the Trust (Investment Manager). The Investment Manager is a corporate authorised representative (No. 001285637) of Quay Wholesale Fund Services Pty Ltd AFSL No. 528 526, ACN 647 044 602. The Investment Manager’s authority under its Corporate Authorised Representative Agreement with Quay Wholesale Fund Services Pty Ltd is limited to general product advice regarding the Trust only. Quay Wholesale Fund Services Pty Ltd is the trustee of the Trust and the issuer of its IM (Trustee).
The contents of this document are not intended as financial product advice and have been prepared without taking into account your personal circumstances, investment objectives or particular needs. You should read the Information Memorandum for the Trust in full to consider whether an investment is appropriate for you.
Neither the Investment Manager, Quay Wholesale Fund Services Pty Ltd, nor the Trustee guarantee the repayment of capital, the performance of any investment or the rate of return for the Trust. Past performance is not necessarily indicative of future performance. An investment in the Trust is not a bank deposit and is subject to greater risk than cash investment products including loans of income and part or all of the capital itself.
We strongly suggest that you seek your own professional financial or legal advice prior to any investment decisions.