The Bauspar system is a sound and simple alternative designed for customers who need to finance the acquisition, construction or renovation of a home. It plays a pivotal role for housing supply and affordability as well as for the accumulation of property and for personal financial security upon retirement. The system’s fundamental idea of a mutually supportive community of savers may be illustrated best by the following example:
Let’s assume there are ten potential home builders who lack the necessary financial resources for the construction of their dream home. Let’s further suppose that every year each of them would be able to put aside one tenth of the amount necessary to purchase the desired home. Hence, each of them could acquire the home after ten years. However, if these ten potential home builders pool their resources, the first home can be build in the first year by drawing on the savings of the ten participants. In the second year, the second home could be build by using the payments of nine savers and the repayment of the first participant and so on.