Startup Attracts Top Tier Developers

Proptech start-up Downsizer has hit the big time, gaining an A+ credit rating and $2.5 billion in off-the-plan sales listings. 

The platform, which matches downsizers with developers, marked the milestone after launching last year, spending nine months in “stealth mode” before targeting the national market in December.

The rating has enabled the company to work with top-tier developers while helping unlock the 1.8 million people expected to move from their family homes in the next five years.

Downsizer chief executive and co-founder Mark Macduffie said he’s proud of what they had achieved in such a short time.

“We originally had five people working for us, all contractors, including me and now we have 35,” Macduffie said.

As a business and platform, Downsizer faced a significant obstacle in expanding because construction lenders required developers to have a specific, higher rating, he said.

“Until the first of September, we were B- and now we are A+ rated, which makes us the cheapest deposit bond in Australia.

“This allows us to compete with QBE, the market leader traditionally.

“The level of developers who we are talking to has gone from middle tier to institutional level very quickly.”

Downsizer has on-boarded 20 developers in the past three months and have conducted $50 million in sales.

The company was also listed by the Australian government as a high-potential tech export, with plans to launch in the United Kingdom next year.

Macduffie said the Downsizer marketplace worked by de-risking both sides of the equation.

“One of the biggest problems developers have in this market is margin compression and making sales in a tough environment because of inflation and interest rates,” Macduffie said.

“Downsizers as a cohort are the biggest segment of people buying residential property in Australia, and we’re here to help unlock that.

“So we offer a marketplace for developers and downsizers and we also qualify every downsizer, because we have a real estate licence.

▲ Downsizer chief executive and co-founder Mark Macduffie.

“They can pay a bond instead of the 10 per cent deposit and we keep in contact with them.

“I’ll engage with them 120 days before settlement and say, ‘Hey, your apartment is almost ready, would you also like us to sell your current house for you?’.

“So, this de-risks the whole process for both parts of the equation.”

They recently helped a downsizer secure a $9-million apartment.

Downsizer work with a range of clients, for example people aged in their 40s looking to free up capital to travel the world, and an 80-year-old Order of Australia medal awardee.

“Developers can come to us to access a whole market of asset-rich downsizers,” Macduffie said.

“We’re not just for retirees—we’re for the asset rich, cash rich: we’re for the asset rich, cash poor and everything in between.

“We do everything for the developer in this space—we act as a channel sales agent, with technology and marketing so it’s kind of a one-stop shop.”

The buyers are looking at suburbs in every state with current registered assets in the platform worth $3.5 billion. 

“We’ve been in the market for 18 months but the first nine months were in pilot mode,” Macduffie said.

“So nobody knew about us apart from the 17 projects in three states and we only advertised in those suburbs.

“But we could see that people were searching in suburbs to see if there was stock available—in those nine months we had 720 separate suburbs searched.

“We are now up to around 1600 suburbs.

“I don’t have enough stock to keep up with demand ... we have buyers ... there’s no boundaries.”

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