First Home Buyer shares have dropped drastically in the property market, hovering around the 12% mark while Property Investors dominate the market. Negative gearing has often been pointed out as a factor that hinders First Home Buyers from entering the property market because of house price inflation, but a leading economist believes that in this lies the solution for enticing First Home Buyers back into the market.
AMP chief economist Shane Oliver believes that First Home Buyers can purchase their first property strategically as an investor by negatively gearing the property. This is the same concept they used when purchasing their first home. Their mortgage was paid off by rental income and mortgage write-offs from negative gearing.
He is encouraging First Home Buyers to follow suit, but as with any investment, consulting a financial adviser will help avoid any pitfalls with this strategy.
Read more about this on the Smart Property Investment website.