- Downsizer is a tool to make the downsizing transition easier.
- Mark Macduffie and property developer Michael Kelly created the Downsizer Bond.
- With the use of the product, a senior homeowner successfully downsized.
The proptech outlook is bright, as some of Australia’s finest minds tear down the barriers of real estate with innovative solutions. The series continues with Downsizer’s Mark Macduffie, who is based in Sydney. The proptech series is written with thanks to Cullum Ashton and Proptech Hub WA.
With thirty years of design work and implementation experience with large financial institutions under his belt, Downsizer co-founder Mark Macduffie formed what he called a natural partnership with Michael Kelly.
Kelly built properties for owner-occupiers who were often downsizers and said in passing to Macduffie that he could sell twice the number of properties if there was no need for a cash deposit.
From this conversation, Downsizer was born.
What is Downsizer?
Macduffie said Downsizer began as a developer-led product but it quickly morphed into a consumer-based one.
According to their website, the Downsizer platform is the result of decades of knowledge in property, finance and tech. It is a tool to meet the needs of a growing population of downsizers, a term used to describe homeowners who are selling their family home in favour of a smaller one.
“[The startup] allows downsizers with enough equity in their current home to buy their next dwelling off the plan with zero cash deposit,” Macduffie said.
Creating the Bond
In partnership with Deposit Power, Downsizer’s co-founders Mark Macduffie, Michael Kelly, and Damian Morgan went to work on creating the Downsizer Bond.
“This product [Bond] allows a large number of people – in fact, 1.7 million downsizers within the next five years – to re-enter the property market; this is good for everyone, from developers to real estate agents, to vendors and the downsizers themselves,” Macduffie said.
“The Downsizer Bond can be used to purchase both off-the-plan properties, as well as existing houses, and the cost to use this product is less than obtaining bridging finance or having to give the bank a financial interest in your home if you use a reverse mortgage.
“Use of a Downsizer Bond does not affect a real estate agent’s commission in any way and it allows a new group of buyers to enter the market, which should increase sale prices as the competition to purchase increases.”
Downsizer’s test pilot, which was launched in February 2022, was created without the support of venture capital, Macduffie added.
At first, it was just the founders pitching in, then, friends and family.
“It was 18 months of slow-burn bootstrap, design, and test work,” he said.
“We built, designed, and launched the pilot with no external enterprise, but traction has been growing every week.
“With the market the way it is now, Downsizer is set to grow in Australia and we are launching a pilot into the UK and in the not-too-distant future, we will venture into parts of the USA.
“Our product is unique and offers people a real solution that allows them to ‘rightsize’ their lives.”
A successful outcome with Uncle Hasim
With the help of the startup, a recent end-to-end downsizer made the transition to a new lifestyle. Hashim Abdul-Rahman, who Macduffie affectionally refers to as ‘Uncle Hashim’.
“I had just reached 75 years of age,” Abdul-Rahman said.
“I was finding it very difficult to maintain a three-bedroom house – having to mow the lawn and so on. So I made a decision to move.”
Abdul-Rahman knew that to buy a new house, five or 10% would have to be put down.
“I didn’t have that sort of money, being a pensioner.”
“I think this [Downsizer] is a good way to do it; you don’t need to put down a huge payment, just $1,500.”