Housing may have been the best investment in 150 years — but how to make it accessible to youth?

NBER did publish a paper earlier this year, that tracked investment returns in a variety of assets: naming housing to be the best performing one — and here is the problem: it becomes inaccessible to the current generation of breadwinners: while the long period of excessive liquidity depressed short and long-term interest rates and pushed liquidity providers searching for alternative returns — this contributed to real-estate investment trust bonanza: stimulating new development but first deposits size also rose, especially in those geographies, where young professional generations are flocking in.

The gap between the first deposit and the purchasing power of starting salaries make traditional mortage financing unavailable, leaving youth to either seek support from banks of mom and dad, who’ve enjoyed a good run with their pension pots and often invested in buy to let markets. The outlook for XYZ generation having the same ride is grim. So they are looking elsewhere — in the realm of alternative finance.

Current dynamics and the outlook of the housing market change all elements of how people spend, save and invest money. It stems from the everyday frugal habits, borne by fintechs allowing free basic services and banks penalising free services with fees to compensate for negative long-term interest due to liquidity glut.

Liquidity glut makes things different for banks and fintechs: where in former it is stimulating product teams, each with its own P&L, to create different fees to compensate for lack of interest, the latter use cheap capital to fund their long-term strategies of building stickiness, achieving loyalty and then delivering the long-term value.

  • Fintechs have the luxury to design services the way they are seen by the eyes of a customer, not a banker (where the vision is all fuzzy due to decade-long tradition of established business going back hundreds of years ago — hence the paradox of tradition of banking and supposed trust to fintechs);
  • Fintechs look natural as they are a model of a digital consumer platform providing a financial service, not a financial platform being redone in digital form;

What about real-estate:

There is already a plethora of services: startups like Unmortgage, StrideUp and others are providing access to institutional capital that is reassembling mortage on terms accessible to savvy modern consumers: moreover they take the best use of data that comes with the user to assess the creditworthiness and risk of applicants — doing it differently than banks do.

Tokens of crypto-protocols may also provide a helping hand: as they can reliably provide distributed ownership to originally corporate asssets: allowing B2C segments to invest in real-estate originally acessible to big ticket investors

Both may benefit from housing automation companies, helping to insure housing, track utility spending and offer better rates — all for enabling the best cost of living for the data friendly, experience rich and cash-poor professionals.

All these are providing a new perspective on how real-estate B2C services should be offered and how compatible they are to the minds of data-savvy consumers compared to the old world.