YND: Hi Martti! Let's start with the basics. Can you tell us what Asumma is?
Martti: Asumma is a platform that helps people buy homes. We use a mechanism called co-investment where we provide capital so buyers who don’t have enough savings themselves can buy a property.
We are starting with people who are buying homes where they are currently living from their landlord. So when a landlord wants to sell a property, we make it possible for the tenant to buy their apartment.
Our capital comes from real estate investment companies. We help them invest in German residential real estate. We’re the asset manager and make the investment decisions.
We think we will increase the number of people who own their home in Germany. Currently, only 45% of Germans are homeowners. Only 11% of tenants have enough money saved for a deposit. For the vast majority of buyers, banks require a 20-30% deposit. Property prices are increasing in the top cities so it becomes harder and harder to save enough. Asumma will help the younger generation buy property.
YND: How will Asumma use technology?
Martti: Primarily through risk assessment and making investment decisions. We can use data on apartments and people to build a profile that helps us make the decision on whether to put up the capital and coinvest.
YND: How did you get into property tech?
Martti: I’ve been into architecture and urban design for a long time. It’s a serious hobby. I started a bike lane initiative in Berlin that is now being developed by the city. I love to understand how cities and urban areas develop and function.
This is one of the reasons I have built different ventures in this domain. One was a reletting automation platform for asset management companies and property managers. Before that, I built a visualization tool for public auctions of property and foreclosed real estate. A long time ago, in 2008, I built a site for booking holiday apartments in my home country, Finland. It was just before Airbnb got started and a magnificent missed opportunity!
YND: What are the biggest problems with the German housing market today?
Martti: The biggest is simply the very limited supply in high demand areas such as Berlin, Munich, and Hamburg.
New development opportunities are difficult often - there is a lot of bureaucracy and it takes time to get the permits to build. But the rising prices also encourage plot speculation, which means that people do not develop because they think they will make even more money if they hold the land and wait a few years until property prices are even higher.
On the buyer side, there are high fees. These are usually about 15% when you include broker and notary fees, and state taxes. I think the government should get rid of the buyers' requirement to pay the broker. The one who commissions the broker should pay the fee - 99% of the time this would be the seller. This would also force the brokers to compete on price and service. The other downside is that the fees and taxes mean that prices need to rise significantly before you sell, otherwise you risk making a huge loss.
YND: If I buy a property with Asumma and want to move after a few years, can I sell it?
Martti: You can sell if you want to. We’re planning to be very friendly to the buyer. We’ll also make it possible for people to buy us out so they can take complete ownership of the property when they can afford to do so.
YND: Does your business rely on continually increasing property prices?
Martti: It does not, but we try to limit our risk by only investing in high demand areas where we think that prices will appreciate. This also limits the consumers' risk because no one wants to buy a home that falls in value!
YND: Do you have any competitors at the moment?
Martti: There are similar models in US and UK. Like us, these companies are buying property in high demand cities. We believe we are the first to do this in Germany.
YND: How are you working with YND?
Martti: I’ve known Philipp (YND’s CEO) for a long time. We’ve always wanted to work together. At the moment YND is providing design help, branding, logos. Our next steps are to engage engineers and start developing our technology.
YND is a great match for us because you do a lot of work with fintechs and know all about the legalisation, security requirements.
YND: We’re very excited to finally work together, Martti! Good luck with Asumma, we’re sure you’ll be doing plenty more interviews in the future!
Keep an eye on the Asumma website if you’re interested in learning more about home co-ownership. It’ll be up and running soon with more details about the service.