Habi: Unleashing liquidity in the LATAM property market

Habi is on a mission to unlock liquidity for Latin American families. Since forming in 2019, the drive has remained consistent. Habi wants to help its customers buy and sell their homes more quickly and efficiently. And without the uncertainty of traditional real estate transactions.?

Adrian Mastronardi is the Chief Technology Officer at Habi. He explains that his company’s competitive advantage is possessing the best pricing database in the market. This allows accurate valuation of each house in the market. “Latin America lacks two of the most fundamental factors to have a real estate liquid market,” explains Mastronardi. “These are funding and transparency of pricing. With funding, you don’t have enough access to mortgages in the region. So, liquidity is a very important aspect. With transparency of pricing, it’s very difficult to know what the true price of an asset in Latin America is.”?

A different approach to real estate

It is fair to say the Latin American real estate market operates differently from that of its US or European counterparts. One of the biggest reasons for this is because of a lack of infrastructure. Before Habi, no other player took on the database of pricing. But their arrival has changed the game. “There is no real database that aggregates all the data. And with the modern data analytics today, it;s about taking advantage to provide good pricing and a fair market price,” adds Mastronardi.?

Today, Habi is the largest buyer and seller of used homes in Colombia and Mexico. And the largest mortgage originator in Colombia. Through the efficient use of data and technology, the company has reduced the time it takes to sell a home by 30x. Going from an average of more than 10 months to just 10 days, through a reliable and trustworthy process. Habi’s data-driven approach allows it to offer a range of products and services. These include MaketMakeriBuying, brokerage, financial services, marketplace and a free home e-valuation tool.?

Navigating the LATAM property market

German Rueda, Vice President of Transformation at Habi, explains his organisation is faced with a market that lacks transparency. Rueda recognises the task Habi has been faced with. He reveals it has worked extensively to collect data through a manual process of both public and private data sources.

“What makes Latin America different in terms of the real estate market versus other parts of the world is the very limited liquidity. There’s also a cultural aspect. Latin American people tend to save their money or create their wealth by saving in bricks. They’ll invest that money into their home but it’s frozen because it’s very hard to sell.

“In Colombia, for instance, you could take an average of 12 months to sell your home. People, because it’s a cultural thing, don’t like to go down a mortgage route. They’d rather take out a credit card at ridiculous interest rates. Rather than taking out a mortgage where you could take advantage of housing rates. These are a fraction of what you could access at capital. There’s very limited liquidity and a lot of frozen wealth in terms of what people have saved. They cannot access that capital for multiple needs. I think that cultural mindset that ‘It’s my home, I don’t want to touch it’ has created very specific conditions for Habi to thrive and grow into what we’re building. It’s been four and a half years, but we’re just scratching the surface of the potential of what we could do.”?

User Experience

Carlos Pinilla, Vice President of UX at Habi, adds that Habi’s model is efficient from a user experience point of view because checking the price of a home is traditionally a manual process. “When a person goes to the effort to sell their home, they have to find other values that they don’t know,” adds Pinilla. “This means there’s a lot of friction in the process. Habi is trying to reduce all the friction in the process which makes people suffer when they are trying to sell their homes.”?

Rueda adds there is also a regulation component at play. In Europe and US markets, real estate agents are required to be fully qualified whereas in Latin America, it is less formal which creates issues with customer trust. “What Habi offers is transparency to guard against fraud to tackle the challenges in our unique market with what we’re building through technology .”?

Read the full story here