Premier Mark McGowan has announced a $420.9 million extension of the loan book of Western Australia (WA)’s Keystart scheme in order to improve housing affordability for people in the state.
The amount will be added to the initial fund of $500 million, which was approved when the McGowan government came to power. The additional funds will help more Western Australians into home ownership, especially at this time when property prices are more affordable, the McGowan government said.
Of the 2,789 loans approved by Keystart in 2017-2018, 2,169 were allocated for construction or newly constructed homes. The building activity boosted the state's economy by supporting an estimated 1,700 jobs and generating up to $670 million in economic activity.
The McGowan government said that the new cash infusion will support the residential construction sector and provide more homeownership opportunities to people, including boosting Keystart's lending capacity to $4.8 billion.
The extension will be able to produce an extra 1,100 home loans.
The Real Estate Institute of Western Australia (REIWA) welcomed the news, saying that the initiative would help more West Australians achieve the dream of having their own homes.
“Although housing affordability has improved in WA in the last couple of years, there is still a significant number of West Australians who struggle to save the 20 per cent deposit required by most lenders to purchase a property,” said REIWA Deputy President Lisa Joyce.
Keystart Home Loan applicants in the Perth Metro area must earn under $90,000 if single, under $115,000 if with a partner, or under $135,000 if part of a family.
“Due to recent financial changes to the APRA regulations and the Royal Banking Commission, lending criteria will likely tighten in 2019, making it even more difficult to enter the property market,” Joyce said. “While we are pleased the McGowan government has agreed to increase the loan amount of the Keystart scheme, there is still more that can be done. The WA market remains a challenging environment for many West Australians, and we would like to see the government broaden the eligibility criteria by increasing the income limit of Keystart so more people can access these loans.”
