A Brick to the Head

Hi Barefoot,

I have been thinking about what I could do to have my deposit savings keep pace over the next couple of years before I buy my place. One idea I have is to invest my deposit savings into BrickX, which allows you to buy a share in an investment property. I see it as a hedge against rising property prices. What do you think?

James

Hi James,

I wouldn’t do it, even though it is a hedge (less their fees, and less any potential capital gains tax).

Reason being, I don’t advise people to buy an investment property before they purchase their principal place of residence, because in all the years I've been doing this I’ve never seen it work out. (And with a BrickX property, you don’t have the option of eventually living in it.)

ScoMo’s new ‘First Home Super Saver Scheme’ is admittedly a bit of a fizzer (maybe that’s why it’s got the acronym FHSSS)?

But it’s exactly where you should be saving for the last few years of your deposit. That’s because a couple earning $65,000 each will save an additional $12,000 by using the scheme -- guaranteed. And for the average Aussie trying to buy a home in one of the most overvalued patches on earth, every cent counts.

Scott