Crypto Mortgages Test Home Buyers’ Appetite In Digital-Currency World
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Crypto Mortgages Test Home Buyers’ Appetite In Digital-Currency World

Miami firms now offer home loans in crypto, but many traditional lenders doubt such practice will gain scale.

By Deborah Acosta
Mon, Apr 11, 2022 11:15amGrey Clock 3 min

Some Miami developers have enabled buyers to purchase homes in cryptocurrency since at least 2021. Now a pair of Miami lenders is going one step further by offering home mortgages in digital currencies.

Milo, a fintech company in the lending business, made the first crypto home loan in March, when it provided a 30-year mortgage in bitcoin for a Miami duplex.

The firm says the early response among other crypto-oriented home buyers has been so enthusiastic that it is already looking to double the size of its Miami office to 100 employees to handle the anticipated demand.

XBTO, another cryptofinance company with offices in Miami, said it is also gearing up to offer crypto mortgages this year, in partnership with a traditional Miami-based mortgage lender.

“Between crypto millionaires who don’t want to sell their cryptocurrency and foreign buyers who have trouble entering the market, we see a huge demand,” says Joe Haggenmiller, head of markets for XBTO.

Kieran Gibbs is one of the newcomers to the city who has expressed interest. The professional soccer player from the U.K. moved to South Florida last year to play for the local Inter Miami CF. He said that he has been receiving half of his salary in bitcoin since January and that he is in talks with XBTO to secure a crypto mortgage.

“I’m renting my property at the moment and I’d like to buy,” Mr. Gibbs said. “The trouble is I haven’t been here for long enough to get enough credit, so it’s difficult for me at the moment to get a mortgage.”

Crypto mortgages are structured much like traditional mortgages and are lent out to home buyers in dollars but are meant to appeal to people who have large crypto holdings they don’t want to convert to dollars.

These mortgages require additional collateral in the form of a cryptocurrency, and the agreements allow the lender to take ownership of the home and the additional collateral in the event of default. If the value of crypto falls, the borrower may have to put up more crypto or other collateral.

Many traditional lenders are sceptical that loans in digital currency will ever gain scale, and analysts list numerous risks and complications when lending in crypto.

For one, they point to the legal pitfalls of engaging in a space that is still largely unregulated. Volatile fluctuations in the price of digital currencies could mean that lenders may require a borrower to put up additional collateral if the crypto price drops significantly.

“Anyone in the digital asset space should proceed with a great degree of caution,” says Richard Levin, an attorney and chair of the fintech and regulation practice at the law firm Nelson Mullins Riley & Scarborough LLP.

Even proponents of these loans say that the new companies are already encountering logistical issues.

“Integrating the legacy mortgage system with the new crypto environment is an operational nightmare,” says Lorenzo Delzoppo, an attorney who specializes in disruptive technology and who is consulting XBTO as they finalize their mortgage product.

Still, he adds, “It’s all incredibly exciting.”

Crypto mortgages are only the latest way that Miami businesses have experimented with the nexus of real estate and digital currencies, a trend that is on display this week during Miami’s bitcoin conference and other crypto-related gatherings.

Propy, a property-tech company whose chief executive resides in Miami, made headlines in February for being the first to process a U.S. real-estate transaction as a nonfungible token, or NFT.

Real-estate developer PMG, in a partnership with the crypto-derivatives exchange FTX, said it has accepted more than $20 million in cryptocurrency payments toward preconstruction purchases of about 60 condo units at its E11even Hotel & Residences.

Lofty, a condo project in Miami’s Brickell district, is providing a digital NFT art piece as an amenity along with the purchase of a unit.

Milo, meanwhile, is offering interest rates for crypto mortgages between about 4% and 6%, which skew a bit higher than what banks tend to charge for dollar-based loans. The 30-year fixed-rate mortgage averaged 4.67% last week, according to mortgage-finance company Freddie Mac.

The crypto lender allows borrowers to take out loans of up to 100% of the purchase price by pledging their bitcoin as collateral. XBTO will require purchasers to put down 10%.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: April 5, 2022.

 



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We reveal the No. 1 areas for price growth in each capital city

By Bronwyn Allen
Thu, Jul 18, 2024 3 min

Home values across Australia rose by a median 8 percent in FY24, delivering the equivalent of $59,000 in new capital growth to the two-thirds of the population that owns a home, according to CoreLogic data. Investors received total returns of 12.2 percent over the year, including capital gains and gross rental income.

Very tight supply and demand in most capital cities except Melbourne and Hobart was a significant driver of the capital growth, with the smaller and more affordable capital cities of Perth, Brisbane and Adelaide experiencing the most price appreciation over the year. A lack of properties for sale trumped the usual dampening effect of higher interest rates.

As usual, some areas outperformed their city’s median growth benchmark. Here are the top SA3 areas for capital growth in each capital city of Australia in FY24. SA3 areas are large suburbs, or districts incorporating clusters of suburbs, with more than 20,000 residents.

 

Sydney

Home values across Sydney rose by a median 6.3 percent in FY24. The No. 1 area for growth was Mount Druitt. Its median value rose by 13.96 percent to $859,939. Mount Druitt is located 33km west of the CBD. It incorporates the suburbs of Mount Druitt, Ropes Crossing, Whalan and Minchinbury. The Mount Druitt community is very multicultural with almost one in two residents born overseas. It is home to many young families, with the median age of residents being 33 compared to the NSW median of 39.

 

Melbourne

Home values across Melbourne rose by a median 1.3 percent in FY24. The top area for capital growth was Moreland-North with 4.71 percent growth. This took the district’s median home value to $746,488. Moreland-North includes the suburbs of Hadfield, Pascoe Vale and Glenroy. It’s a multicultural community with a particularly large contingent of residents with Italian ancestry. One or both parents of 66 percent of residents were born overseas, according to the 2021 Census.

 

Brisbane

Home values across Brisbane rose by a median 15.8 percent in FY24. The No. 1 area for growth was Springwood-Kingston in Logan City. Its median value swelled by 25.55 percent to $710,569. Springwood-Kingston is approximately 22km south of Brisbane CBD. It incorporates the suburbs of Springwood, Kingston, Rochedale South and Slacks Creek. It is a multicultural community with one or both parents of 55 percent of the residents born overseas, according to the 2021 Census. More than 15 percent of residents have Irish or Scottish ancestry.

 

Adelaide

Home values across Adelaide rose by a median 15.4 percent in FY24. The best area for capital growth was Playford in Playford City. Its median value soared by 19.94 percent to $530,991. Playford is approximately 40km north of Adelaide. It incorporates the suburbs of Elizabeth Downs, Elizabeth Grove, Angle Vale and Virginia. It is home to many young people under the age of 40. The median age of residents is 33 compared to the state median of 41.

 

Perth 

Home values across Perth rose by a median 23.6 percent in FY24. The No. 1 area for growth was Kwinana in Kwinana City. Its median value skyrocketed by 33.19 percent to $618,925. Kwinana is approximately 37km south of Perth CBD. It includes the suburbs of Leda, Medina, Casuarina and Mandogalup. Henderson Naval Base is located here and there is a significant community of servicemen and ex-servicemen living in the area. It is home to many young families, with the median age of residents being 33 compared to the state median of 38.

 

Canberra

Home values across the nation’s capital rose by a median 2.2 percent in FY24. The best area for capital growth was Weston Creek. Its median value rose by 5.24 percent to $937,740. Weston Creek is approximately 13km south-west of the CBD. It includes the suburbs of Weston Creek, Holder, Duffy, Fisher and Chapman. Approximately 43 percent of residents have a bachelor’s degree, which is on par with the ACT median but much higher than the national median of 26 percent. Household incomes are about 35 percent higher than the national median. Almost one in five residents work in government administration jobs.

 

Hobart

Home values across Hobart fell 0.1 percent in FY24. The top performing area for capital gains was Sorell-Dodges Ferry with 2.78 percent growth. This took the area’s median home value to $615,973. Sorell-Dodges Ferry is approximately 25km north-west of Hobart. It incorporates the suburbs of Richmond, Sorell, Dodges Ferry, Carlton and Primrose Sands. The area has a large community of baby boomers and retirees, with the median age of residents being 43 compared to the Australian median of 38.

 

Darwin

Home values across Darwin rose by a median 2.4 percent in FY24. The No. 1 area for growth was Litchfield. Its median value moved 3.21 higher to $672,003. Litchfield is about 37km south-east of Darwin and includes the suburbs of Humpty Doo, Acacia Hills and Southport.  It has a high proportion of middle-aged residents, with the median age being 39 compared to the territory median of 33. About 12 percent of residents are Indigenous Australians. The biggest industries are government administration and defence. Median household incomes are about 35 percent higher than the national median.

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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