Australian proptech surges amid housing crisis and innovation push

Australia’s property technology (proptech) sector is gaining momentum, driven by a national housing affordability crisis and a wave of innovative startups aiming to reshape the real estate landscape.

As house prices soar—Sydney’s median home now costs $1.2 million, requiring an annual household income of $280,000 to be within reach—proptech firms are stepping up with solutions to streamline transactions, boost affordability, and challenge traditional market dynamics.

Australia has the most expensive real estate advertising fees in the world, with the vendor-paid advertising (VPA) model only existent in a few countries, including New Zealand, Sweden and Norway.

One such standout is Homely, a property listing platform that has raised more than $70 million from real estate industry investors.

Homely’s Uplift scheme offers cashback incentives to agents, positioning it as a challenger to Australia’s dominant real estate duopoly held by realestate.com.au and Domain.

Homely in December also entered a partnership with Gumtree, and has since delivered over 113,000 free agent enquiries and more than 3 million listing engagements across Australia without adding extra cost for either agents or vendors.

Experts, however, have raised concerns about the Uplift scheme’s transparency, with some calling for scrutiny to ensure fair competition. SBS has reported that more than 200 agencies around Australia are taking part in the scheme in which agents are receiving a monthly cashback incentive to help promote Homely.

Homely insists its payments are not savings passed to vendors, but the debate underscores the sector’s growing pains.

Elsewhere, Coposit, a new proptech platform, is making waves by allowing buyers to purchase new homes with deposits as low as $10,000.

The platform is not a lender and does not finance the remainder of the deposit. Instead, buyers pay the rest of their deposit in weekly, interest-free instalments while the property is under construction in a structured pathway to home ownership.

While often innovative or well-intentioned, models that allow buyers to get into the property market - whether through private products or government schemes - do highlight the delicate balance between accessibility, personal financial capabilities, and wider economic financial stability in a heated market.

Proptech could lessen property charges

Established players are also innovating.

Aussie, a major mortgage broker, recently launched Aussie for Agents, a platform connecting real estate agents with millions of buyers and vendors, streamlining the sales process.

This move reflects a broader trend of proptech integrating technology to enhance efficiency, with firms like Agora expanding into Sydney and Melbourne to capitalise on Australia’s construction and residential boom.

Despite the growth, challenges persist.

Speaking to API Magazine, Michael Carbone, Head of Marketing, Coposit, said the biggest obstacle is breaking through long-held assumptions.

“Many buyers believe that unless they have the full deposit saved upfront, they’re simply not ready to buy, and that’s no longer true in many cases.

“Our job is to reframe what ‘being ready’ looks like and build trust by showing that Coposit is not a loan, but a structured way to secure a property while easing cash flow pressure.”

Proptech awareness in Australia on a broader level was also a bit patchy, he said.

“Awareness is growing, but it’s uneven.

“Most Australians are still navigating the property market through very traditional channels, so when a new product comes along, it requires a bit of re-education.

“That said, younger buyers, especially first-home buyers, are increasingly open to new solutions, particularly if they solve real pain points like deposit barriers or affordability gaps.”

Housing crisis shines light on proptech

The Australian proptech market often sees startups plateau at the seed-to-Series A stage due to limited local venture capital. Many firms, like those backed by Sydney’s Taronga Group, look to the United States for funding to scale to Series B and C rounds.

The time zone difference and distance pose barriers, but successful firms are finding ways to leap across the Pacific. A quarter of Taronga’s portfolio consists of Australian proptech startups, complemented by North American and Asian ventures.

The housing crisis, a key election issue in the 3 May federal election, has amplified proptech’s relevance. Both major parties—victorious Labor, with its 10-billion-dollar plan to build 100,000 homes, and the defeated Liberals who had promised infrastructure investment and pension withdrawals for deposits—faced criticism for policies that may inflate property prices further.

Proptech offers a counterpoint, with AI-driven tools and sustainability solutions emerging as game-changers, as venture capital investment globally grew from $11.38 billion in 2023 to $15.1 billion across fewer but larger deals in 2024.

As Australia grapples with a market where homes cost eight times the median income, proptech’s role in fostering affordability and efficiency is critical.

Whether through disruptive platforms like Coposit or newly established players like Homely, the sector is poised to shape the future of property in a nation where the dream of homeownership remains elusive for many.