Stupid idea probably, but here it is:
The housing market is something of a stable investment. Typically. People need somewhere to live. Population growth happens. Houses get more expensive.
In Iceland (in the capital region), the average sale price of a property in 2001 was 12mkr in 2001[0]. In 2015 the average was 37mkr. For first time buyers entering the market they now need an average 7mkr deposit in order to secure a 80:20 mortgage. A rather daunting feat compared with the 2.4mkr required in 2001.
(As a comparison, inflation (which wages at best track) would value that 12mkr property as 23mkr by 2015 - and that's with the 18% average of 2008 following the crash)
Much has been made of the 7% interest rates, and the ongoing discussions around inflation indexed mortgages are not what i'm interested in. We are where we are.
But what if a company/charity/movement existed (Let's name them "ClimbTheMarket") that allowed people to start getting on the housing ladder whilst renting.
I'm awful at explaining things, and this idea isn't completely formed - so let's tell a story of how I think it would work.
Jane wants to buy a flat. Her only option is to save 7mkr or move to Selfoss. Meanwhile, she's paying extortionate 260.000kr rent in Reykjavik. She's managed to save 1mkr over the last 2 years and thinks "I'll never own an actual house". Then she hears about ClimbTheMarket. She's able to buy a fraction of someone else's house using her 1m. But more than that, since most of the way people move up the ladder is due to the fact that house price appreciation is on the whole price of the house, not on just what you own, she's able to borrow against that 1m deposit on that other house. So she is able to borrow 4m against that 1 and she now "owns" 5mkr of Icelandic realestate. They're paying rent on it through ClimbTheMarket, and she gets a share of it. It's almost enough to pay her 4mkr mortgage, but she has to top it up a couple of thousand krona.
Now if the house price goes up by 20%, when she sells she's doubled her money. It's still a long way away from 7mkr but she's getting there.
There'd be a whole load of legal issues that'd need ironing out, and I'm not sure how selling would work (perhaps everyone commits to a sale date and the property genuinely goes on the market, or perhaps there's a submarket place for these sub pieces of property).
Does something like this exist?
[0] https://datamarket.com/data/set/c/thinglystir-kaupsamningar#!ds=c!1tt=1c8b:1tu=1c8h&display=line
[1] http://www.inflation.eu/inflation-rates/iceland/historic-inflation/cpi-inflation-iceland.aspx