This article is from the Australian Property Journal archive
THE Western Australian government will include a targeted housing stimulus in the State Budget 2019-20, to help home buyers experiencing difficulties in obtaining loans with the banks.
The government will make temporary changes to Keystart, which will run between July 1 through to December 31 this year.
Established in 1989, Keystart is a state government-owned mortgage lender, helping home buyers who meet certain criteria purchase an owner occupied property in WA.
The temporary changes will see Keystart’s existing income limits will increase by $15,000 for singles and couples and by $20,000 for families, and will revert to the current levels from January 1, 2020.
The measure follows the government’s $420 million extension of Keystart’s loan book in December last year, boosting its lending capacity to $4.8 billion.
In 2017-18, Keystart approved a total of 2,789 loans, with 2,169 loans for construction or newly constructed homes.
Premier Mark McGowan said the initiative will provide a much needed boost to the construction industry, with modelling showing the targeted stimulus will translate into the construction of hundreds of new homes – providing a boost for the housing construction industry and generating WA jobs.
“Importantly the changes are timely and sensible, helping industry get through what it expects to be the bottom of the construction cycle.
“Keystart is one of WA’s great success stories in housing affordability and it continues to help people become home owners where otherwise that might not be possible,” McGowan said.
Treasurer Ben Wyatt said new housing construction commencements have weakened due to a number of external contributing factors, in particular due to the difficulty potential home buyers are having in accessing finance.
“This has impacted on employment in the WA construction industry in the past year. “It is clear that banks have become more cautious with lending in the wake of the Hayne Royal Commission, so we have implemented these temporary changes to make Keystart finance available to people who may have been unsuccessful in applying for a home loan with a bank.
“The state government’s $10,000 First Home Owners’ Grant and discounted rates of stamp duty are also available to encourage eligible first home buyers to build a residential property,” Wyatt said.
Housing Minister Peter Tinley said the broadening of eligibility for Keystart finance will make home ownership accessible for many people who thought it would be unachievable.
“About three quarters of Keystart loan approvals are for the construction of a new dwelling so these changes will also stimulate the building industry through new housing supply.” Tinley concluded.
Australian Property Journal