19 October/20 October 2019 ★ FT Weekend 9
House Home
Property prices in global cities
Sources: Savills Research; Nationwide; NYC Department of Finance; Real Estate Board of Greater Vancouver; Australian Bureau of Statistics; Venture Scanner; UN Dept of Economic and Social A airs Population DivisionRebased
Vancouver
LondonNew YorkSydney Investment in proptech increases
Total funding in real estate technology sector (bn) Europe’s aging populations
Proportion of population aged ()
projection
UKGermanySwedenFranceItaly6 Late-life ghettos will end
View of
Vancouver from
Granville Bridge
Vl_K / Alamy Stock PhotoThe UK’s demographics will change
over the next 10 years. By 2032, official
statistics predict there will be a 26 per
cent increase in people aged over 65
and a 55 per cent increase in those aged
over 85. “We’re massively under-
prepared for this,” says Phill Byliss, head
of senior living at Legal and General.
Like others, he argues the focus should
be on keeping people engaged and
socially and mentally active.
“These days old people live in the
institutions of one,” says Johnson, “and
dwindle through lack of human con-
tact.” He describes old-age care in the
UK as akin tohow mental illness was
treated in the 19th century.Sweden and the Netherlands are
pioneers of community-based old-
ageliving, he says, where such schemes
have been operational for years.
“What they do isn’t perfect but a
standard bearer for what you can do,” he
says. These ideas and smart construc-
tion measures, such as adapting
home environments to the require-
ments of diseases linked to old age,
could help alleviate the strain onpublic
health services.
Elsewhere, BRE and Loughborough
University have created a dementia-
friendly demonstration home where a
100 sq m Victorian house has been
adapted to cater for different types and
stages of the illness.
Kohab, a new inter-generational co-
living company in the UK, builds homes
for the old and young to live together in
the same space. Justin Shee, Kohab
founder, describes it as an attempt to
“recreate natural communities”.
His inspiration was Humanitas
Deventer — a Dutch long-term care
facility for elderly people, where stu-
dents occupy vacant rooms for free in
exchange for spending time with the
elderly residents.
At 91, Harry ter Braak is one of them.
“What I like most is the human scale in
the house,” he says. “And the fact that
there are students around. Living with
students keeps me young.”To read Part One of this series,
go toft.com/2020livingThe new model of
retirement assumes older
residents will live alongsideeveryone else, often in cities
agents’ market share has been hovering
at about 7 per cent for several years.
Bricks-and-mortar agents, meanwhile,
have survived the decade.
Technology is transforming the global
property market in different ways,
however. Investment in so-called
proptech is booming, totalling nearly
$20bn in 2018, a 38 per cent increase
on 2017, according to Venture Scanner,
a research company. For example, in
2018, SoftBank Vision Fund invested
$865m in construction tech start-up
Katerra, as well as online marketplace
Compass and Opendoor, a start-up that
flips homes.
“The last 12 months felt like a tipping
point in terms of amount of funding and
the quality and diversity of companies
we’re seeing springing up,” says Clelia
Warburg Peters, president of Warburg
Realty and a co-founder of MetaProp, a
New York-based property technology
venture capital group. Although no
longer associated with MetaProp, she is
still an investor is proptech companies
in the US.
Warburg Peters says proptech will fol-
low a similar pattern to fintech over the
next decade, and that it will spread
beyond real estate sales to construction,
property management and leasing.
She predicts renters will move away
from long-term leases towards a hybrid
of homes and hospitality, where they
move quickly from one furnished and
professionally managed rental home to
another, guided by technology. “It will
be Airbnb on steroids,” she says.
How we buy, sell and fund our homes
will also be subject to revision by start-
ups, both in the UK and the US. Way-
home in the UK, for example, provides a
bridge between individual and institu-
tional investors, where home ownership
is shared at first and allows for a gradual
buyout over time. Buyers put in a
deposit of at least 5 per cent and Way-
home’s funding partners top up the
remaining 95 per cent. After moving in,
rent is set for the part of the home that is
not owned nd buyers can purchase thea
rest of the house over time, gradually or
in a lump sum.
In the US, start-ups such as Point
allow homeowners to tap into their
home wealth through an equity-sharing
model. Point offers to purchase a share
of typically between 5 and 15 per cent of
the ome’s value in exchange for anh
agreed loan amount (at a fee). It will
make money if the value of the house
rises over the duration of the invest-
ment, and the homeowner pays it a
share of the overall increase, which
could end up being a hefty amount. If it
does not, the owner gets an interest-free
10-year loan.
For investors “tokenisation of prop-
erty” is becoming a new way of diversi-
fying portfolios. Using Blockchain tech-
nology, property owners can issue
tokens, which represent a certain
amount of shares in their asset. Inves-
tors can purchase them, becoming par-
tial ownersexposed to its appreciation.
The technology is already operating in
the US, where last autumn the first
major project in Manhattan — valued at
more than $30m — was tokenised on the
Ethereum blockchain.In Europe, Brickblock, a German
start-up, tokenised the continent’s first
property this year, based in Wiesbaden
and worth €2m.Sleepy retirement villages in remote
countryside, where the median age
rarely dips below 70, may be on their
way out. The new model of retirement
assumes older residents will live along-
side everyone else, often in cities, and
will focus on keeping up relationships
with their neighbours.“We need a new model of retirement
living,” says Malcolm Johnson, emeritus
professor of health and social policy at
the University of Bath. “One which
doesn’t sequester old people in late-life
ghettos but brings them into stimulat-
ing environment.”
Johnson isa gerontologist who was
part of an expert team working on the
Channel 4 experimental television pro-
grammeOld People’s Home for 4 Year
Olds, in which a group of nursery-aged
children were brought into a retirement
community. Tests on the residents
showed improvements to their physical
and mental health after taking part in
the experiment.OCTOBER 19 2019 Section:Weekend Time: 10/201916/ - 18:02 User:elizabeth.robinson Page Name:RES9, Part,Page,Edition:RES, 9, 1