Premier Mark McGowan has announced a predicted budget surplus in the forthcoming mid-year review for the financial year of 2019-20. On the back of this, the WA government has announced significant budget allocations for the housing sector, with plans set to aid first homebuyers, and draw funding back into the local economy with a $421 million expansion of the existing Keystart loans programme.
The Keystart loan programme assists disadvantaged and low-income buyers in buying their first home where the deposit requirements set by mainstream lenders may be unachievable. The housing authority may purchase up to 20% of a property, with the remaining 80% purchased by the homebuyer. The Keystart loan programme started in 1989, with over 66,000 home loans being approved to date.
The success of the scheme is reflected in the recent reporting that WA saw the highest percentage of first homebuyers across Australia in 2018, with Keystart accounts responsible for more than a third of these sales in the 2017-18 financial year.
This planned expansion to the scheme is in addition to the $500 million already approved to make home ownership accessible to Western Australians, and comes at a time when property prices are more affordable.
The planned $421 million expansion to the Keystart loan scheme is set to make stepping onto the property ladder accessible to low-income homebuyers and stimulate demand in the housing market. Premier Mark McGowan said the move comes at a time when it ‘is evident APRA’s credit control measures of the past three to four years and further tightening to come from the Banking Royal Commission, has dampened activity across the nation… The expansion of the Keystart loan programme is to stimulate demand, and allow more first homebuyers the ability to enter the market.’
The extension of the Keystart loan could have a profound effect on the local economy in WA. ‘Last year, 77% of Keystart loans were used for the construction of homes, a clear benefit for our construction industry’ stated McGowan. 2,789 loans were approved in 2017-18 by Keystart with 2,169 for construction or newly constructed homes – building activity that stimulated the State’s economy by supporting an estimated 1,700 jobs and generating up to $670 million in economic activity.
The expansion of the scheme is set to make home ownership more accessible in WA with the ripple effects of such investment to be enjoyed by the local economy, and specifically the homebuilding sector.
If you wish to learn more about the scheme or just need some independent advice about home building or property investment, book a call or phone 1800 184 284 to speak with an expert consultant from iBuildNew.