> should you have to take risks by investing your deposit
yes. There cannot be ways to obtain risk free returns that out-performs inflation. Where would that return come from if it was risk free? It must come, at some aggregate level, via other people's productivity growth. But this means it's a free lunch, and more and more people would try to take advantage of it, thus lowering the expected return of such a deposit scheme (however it is funded).
> the chance to take a bigger risk in the housing market?
A house is not a bigger risk than the stock market tbh. It's why the lender for the mortgage is willing to give some 5x leverage (20% deposit) vs a margin loan in the stock market (which at most they're gonna lend you 50% LVR), and at a higher interest rate even!
It's the fact that real estate is such low risk that so many people, esp. the poorer/middle income people who cannot take the risk of stock market, want to buy real estate.
In the past, you didn't need returns when saving for your down payment. Proverbial dollars in your mattress was plenty good enough to ensure your savings were growing faster than the required down payment
yes. There cannot be ways to obtain risk free returns that out-performs inflation. Where would that return come from if it was risk free? It must come, at some aggregate level, via other people's productivity growth. But this means it's a free lunch, and more and more people would try to take advantage of it, thus lowering the expected return of such a deposit scheme (however it is funded).
> the chance to take a bigger risk in the housing market?
A house is not a bigger risk than the stock market tbh. It's why the lender for the mortgage is willing to give some 5x leverage (20% deposit) vs a margin loan in the stock market (which at most they're gonna lend you 50% LVR), and at a higher interest rate even!
It's the fact that real estate is such low risk that so many people, esp. the poorer/middle income people who cannot take the risk of stock market, want to buy real estate.