Propopoly wins FMA nod for tokenised NZ housing push

Propopoly, a New Zealand fintech, is preparing to launch a tokenised property investment platform after guidance from the Financial Markets Authority (FMA) clarified it does not need a market operator licence for its proposed model.

The guidance confirms the platform falls under an exemption in the Financial Markets Conduct Act, removing a compliance hurdle ahead of a rollout aimed at retail participation in residential development projects.

Propopoly's model gives investors exposure to the full residential development cycle, from land acquisition and construction to the sale of completed homes. Investors take a fractional stake and receive a proportionate share of any profit once homes sell.

Regulatory position

The FMA guidance states the model "falls within section 309(2)(b) of the exemption, meaning the platform is not a financial product market under the Financial Markets Conduct Act and does not require a market operator licence". The guidance followed the regulator's tokenisation consultation process, which ran through 2025 and closed in November.

The regulator described its work on tokenisation as "a dialogue about the current use and future potential of tokenisation in New Zealand's financial markets." It has also signalled it intends to publish insights in the first quarter of 2026 outlining its likely direction on the topic.

Tokenisation has drawn global regulatory attention as firms explore digital representations of ownership interests and related controls. The FMA discussion paper noted growing international adoption and sought feedback on benefits, risks, and whether existing rules support or constrain activity in New Zealand markets.

How it works

Under Propopoly's structure, investors buy equity shares in a special purpose vehicle tied to a residential land development. Digital tokens are used within the platform to manage and track those investments.

Development partners manage the building work and then sell the completed homes on the open market. Propopoly said a typical construction timeframe is about eight months, although schedules vary depending on consenting, site conditions, and supply chains.

Propopoly plans to launch five projects this year. It is targeting 350 homes over three years and aims to scale to 1,000 properties nationwide, starting in Auckland before expanding into other regions.

The first project, Victor Lima 6, will aim to raise up to $1.6m and allow around 3,280 investors to participate. Participation can start "with as little as $500 plus any transaction fees".

Housing backdrop

Founder Dehardt van der Merwe linked the model to long-running affordability pressures and falling home ownership rates. He cited Census figures showing 66% of households own their home, down from 74% in 1991. He also pointed to ownership rates below 40% among people aged 25-34, compared with more than 60% three decades ago.

Van der Merwe said the regulatory clarification changes the practical path to market.

"This new FMA guidance is significant as it removes a major compliance barrier and enables the first practical pathway to support the introduction of a tokenised real estate investment model to New Zealand. This approach enables fractional ownership of residential development projects, meaning individual Kiwis can purchase a small share in a property venture," said der Merwe.

Global comparisons

Propopoly is positioning the launch as a world first for a regulated retail model that spans the full development cycle inside a closed tokenised platform. Comparable initiatives overseas have tended to focus on fractional interests in completed buildings or on limited project stages, although approaches vary by jurisdiction and regulation.

Van der Merwe pointed to international momentum for tokenised real estate, citing a Deloitte forecast that US$4 trillion in real estate will be tokenised by 2035, up from less than US$0.3 trillion in 2024. He also cited examples in Canada and Dubai.

"By converting property into digital tokens that can be traded securely, tokenisation offers lower entry costs, greater transparency and liquidity in what has traditionally been an illiquid market," van der Merwe said.

Investor access

The offering will be open only to New Zealand residents, with Propopoly aiming to keep the benefits local. The company is also in discussions with development partners to secure land and build a project pipeline.

"Real estate tokenisation is already gaining traction overseas. In Canada, the T-RIZE Group signed a US$300 million deal to tokenise a 960-unit residential project, while Dubai has launched a government-backed initiative to make tokenised ownership a mainstream option by 2033," van der Merwe said.