Cryptocurrency holders can buy property using cash (and can “HODL” too)
. . . maybe this will drive property prices back up
A new cryptocurrency lending business, Helio Lending (heliolending.com), enables holders of certain cryptocurrencies to buy property using Australian dollars. The borrowers provide their cryptocurrency as security and receive their loans in $AUD. This may drive-up property prices.
Cryptocurrency holders are already registering for the 8thof April, world-first, crypto-bids-only auction for real estate ─ bids will only be in Bitcoin and accepting Binance coin, Bitcoin and AUD for payment. The selling agent Nick Witheriff of LJ Hooker-Kingscliff said of the auction:
“We’ve received interest from a lot of Asian countries, people in the US and Switzerland.”
But John O’Shea, CEO of Helio Lending ─ the financing partner at the auction ─ said:
“For sure, it’s exciting that Greg Costello ─ the president of NuYen, ─ is selling his property this way.
But a crypto-bids-only auction is just the start for people holding crypto who want to buy property. Many of them are bullish about their coin. They believe cryptocurrency prices will rise. So, they want to hold their coin ─ or to ‘HODL’ as they put it. Also, if they’re Australian and they sell their coin, then they have to pay Capital Gains Tax ─ so they’d rather borrow.”
But banks and other traditional lenders won’t take cryptocurrency as security.
To that, Mr O’Shea says:
“Helio will lend in Australian dollars and take certain crypto as security ─ Bitcoin, Ripple, Ethereum or Litecoin. We’ve got US$100 million to lend.
As Mr O’Shea sees it:
“For our customers, it’s kind of a semi-magical two step. First step, they use their crypto asset as security to get a loan from Helio to buy a property mortgage-free. Second step, they give the bank a first ranking mortgage over their new property to get a loan that they use to pay off their debt to Helio.
Boom! They’ve got the property they want and they still HODL their Bitcoin etc. They can HODL all the way to the bank.”
How do they manage to have their cake and eat it too? Mr O’Shea explains:
“Well, thanks to Helio, they go from having no property but a financial asset they couldn’t use as security for a loan to having both a property mortgaged to the bank in the traditional way and an unencumbered financial asset.”
And what does all that lead to? Mr O’Shea responds:
“We’re half-wondering if the much talked about fall in Australian property prices will turn around now that crypto-holders can borrow and bid. A bitcoinist.com survey suggests that nearly 14% of Australians own crypto. Like most Australians, they want to buy property ─ but they don’t want to sell their coin. Helio lets them borrow, buy a property and HODL too.”
As financing partner of the crypto-bids-only auction, Helio may interest the seller Mr Costello who said:
“Some of the coins paid for the property will have to be liquated releasing the mortgage. Maybe, I’ll sell them through NuYen’s internal and secure exchange: maybe I’ll arrange a loan through Helio. I know I want to HODL as many as I can for future gains.”