Written

For

The

Australian

-

Comparing

fractional

property

investing

platforms

for

cash-strapped

first

home

buyers

Ten years. That's how long it now takes an average income earner to save a 20 per cent deposit on an average home in their capital city, according to ANZ's latest Housing Affordability report. And once they finally buy, more than half their income goes to servicing the mortgage. It's no wonder first-home buyers are looking for creative ways in.

One strategy gaining traction is fractional property investing — buying "bricks" in a house rather than the whole thing. Platforms like BrickX let you own a slice of a residential property for under $50 per brick in some cases, with each property carved into 10,000 pieces. You collect a share of the rental income and any capital growth. The catch? You can't live in it. And the returns are eroded by a stack of fees — establishment, entry, management, performance, withdrawal and exit — so the product disclosure statement deserves close reading.

For those who actually want to live in the home they part-own, DomaCom and Bricklet have partnered on a more interesting solution. AMP funds an 80 per cent home loan, while DomaCom's new homeowner equity fund contributes the 20 per cent deposit in exchange for a caveat over the property. The buyer skips the deposit hurdle, only needing to cover stamp duty and legal costs, but pays both the mortgage and a proportionate rent on the investor-owned 20 per cent. After five to seven years, once equity has built up, the homeowner can refinance and buy out the investor at market value.

It won't suit everyone. But for high-income earners stuck on the deposit treadmill, owning 80 per cent of a home today beats waiting a decade. My suspicion is the real bottleneck won't be homebuyer demand — it'll be finding enough investors willing to fund the deposit side of the equation.