Over the last years people saw a dramatic increase in both rents and property prices. Now many are feeling being left-out, as in order to afford their own home they would have to build their savings longer. Asumma wants to make Berlin better by making homeownership accessible and affordable. Their purpose is to create a positive impact on society by enabling more people to invest in their own homes and build private wealth.
COVID-19 affected us all, has changed the perception and values of many tell us a little about how your industry and customers adapted.
Living through the first lockdown due to Corona has shown that people want to improve their quality of living: have lots of private space, own balcony or garden, and access to nature. The majority can also work remotely and don’t need to live in the city centre. Many realise that paying huge sums of money for a small apartment in the city center is not worth it. For half the price they can get a large house, their own land and be close to nature. Suddenly, they don’t need postponing the dream of owning their own house. It is possible to become a homeowner now.
Have you or some of your friends been through the house construction process?
Currently, it’s a mess. It’s complicated, annoying and full of surprises. Budgets explode for 75% of construction projects and half of them are delivered late. There is no digital process for digitally first homebuyers. Houses look mediocre, unless it’s a professionally managed project, but then the price is skyrocketing.
Luckily, Asumma is reimagining how new homes are built and sold. They combine precision manufacturing, innovative technologies, and sustainable materials to make houses of the future today. Their mission is to make living in a sustainable, beautiful home affordable for everyone and to create a positive impact on society by enabling more people to invest in their own homes and build private wealth.
Tell us about yourself and why you decided to work on Asumma?
We are property technology entrepreneurs with 15 years of experience in real estate, construction, and digitalization. Martti Mela is a serial startup founder, inventor, and eco-design movement activist. Vitali Balajevs is a real estate technology professional with an RICS-accredited property degree and a track record of building digital products for early-stage startups. We also are grateful to have a network of people, advisors, who are supporting us on our journey and want to challenge the industry norms.
How did you guys meet? What bonded you together around this idea?
We met at one of the PropTech events organized by Martti in 2016. Martti at that point was building his rental automation company and I was building a digital real estate crowdfunding platform. Since then we were keeping in touch to discuss real estate and proptech market development and help each other with different topics.
In summer 2019 we decided to join forces and work full time on Asumma, which at that point was an alternative finance solution for homebuyers to buy an apartment in large cities without taking a mortgage. However, after gaining more knowledge on the topic and doing many iterations we decided to abandon the idea. There were a couple of reasons for this, but the main one, if we would be successful, means that we would bring more buyers to an already highly undersupplied market and we would drive prices for the apartments even higher.
This is why we decided to tackle the core market problem – housing undersupply and actually build more houses that are affordable, sustainable and digital.
You mention that your houses are sustainable and built using innovative materials. Can you elaborate on that?
Architects, builders, and sustainability advocates are all excited about a new building material they say could substantially reduce CO2 emissions in the building sector, slash the waste, pollution, and costs associated with construction. And this building material has been around for centuries and is called – wood.
There is an improved method of how to work with the wood – structured timber, or otherwise known as “mass timber” technology, such as cross-laminated-timber (CLT). In a nutshell, it involves sticking pieces of soft wood together to create larger pieces that can then be used to build modules. This new way of building material is more durable and way more sustainable than any other types of building materials.
Wood as a construction material combines aesthetic beauty, superior strength, and lightweight. It is ecological and breathable material. It’s safe and healthy and people enjoy wood environments for living and working, citing visual aesthetics, acoustics, and a feeling of warmth.
So effectively you are building wooden houses like Legos. Can you explain why this is better than traditionally build houses?
On top of all the sustainability benefits of wood, it’s also a very easy material to work with. Using building information modeling the factory can fabricate wooden pieces exactly to specifications and being precise up to a millimeter. Door and window openings are in the right places, as well as space for plumbing and electric. It virtually eliminates material waste.
Creating these wooden modules at a factory requires relatively little labor and creates a high level of quality control. The ready items are getting shipped to the construction site on a just-in-time basis, avoiding massive on-site inventory and minimizing on-site disruption. All of these benefits allow us to build 50% faster than traditional construction and makes houses more affordable.
How do you see the houses of the future?
We believe that houses should be sustainably built using environmentally friendly materials that are healthy for the environment and provide a healthy indoor climate. They should be energy efficient and use renewable energy.
Future houses will be precision-built using data-driven optimization at the same efficiency and quality level as car factories. Where every piece of the house is manufactured with new materials, multi-functional elements, shapes and integrated smart home technology that functions seamlessly across the new house — from lighting, to heating, and energy consumption. These houses will be as great and as affordable as current technology permits.
How do you expect the housing market to change due to the COVID-19 crisis?
Already before the pandemic, Germany was missing 700,000 homes. There is a massive undersupply of housing in the large cities and suburbs. Because of this both the property prices and rents are growing.
Now, according to the new report from the World Economic Forum, because of Corona accelerated Work-from-Home policies, 42 million families can leave European cities. Families don’t have to live in the expensive city centres and be close to the office. They can work remotely and live in places that are close to nature, way cheaper to buy and have more private space to increase their quality of living.
Even before Corona, a single and multifamily housing market was growing steadily year on year. New reports are showing that the pandemic is further driving the demand for private houses and accelerating the off-site construction market.
Who would be the best first early adopter for Asumma?
We’ve identified a target group of potentially underserved house buyers. These are tech-savvy, likely a couple or a young family. They are likely renting in a large city but now have an opportunity to work remotely several days a week and are not bound to a single location.
They are interested in buying a new house, without any of the hassles of being a project manager or knowing anything about the construction. They also don’t want to buy an old house as they don’t have the expertise to refurbish it or deal with mold, water damage or any of that stuff. This is why they are excited about our offer.
How to become a homeowner with Asumma?
Once we launched online we were overwhelmed with the positive response and amount of people sharing our beliefs. We now have a waiting list of over 150 people interested in our solution, however, at the beginning, we can only serve a handful of buyers. Those who have a land plot purchased already.
However, we try to get as much feedback from our customers as possible. We are doing one-on-ones with aspiring homebuyers to understand their needs and desires, so that we can develop the houses that they would be happy to live in. If you have ideas for your dream house or you have a plot and are looking to build a beautiful house without stress – feel free to leave your details on our website – asummahomes.com.
When you have some free time from work, how do you spend it?
We both enjoy being in nature, hiking or biking. With Corona restricted travel plans we adapt and start exploring local places and hidden nature spots. Berlin and Brandenburg have a lot to offer, and who knows, maybe this winter season it will still be possible to go skiing and snowboarding to the Alps.
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