Support needed for those entering the property market
It is no secret the property market in Western Australia has weathered challenging times over the last few years, with sales levels and average prices declining since the peak of the last boom in mid-2014.
As I mentioned last week, there are positive signs for the market in 2019 and beyond, meaning for those in a secure financial position, now is an opportune time to get into the market before demand starts to pick up and prices follow suit. For those on lower incomes it can be tough, even with prices declining slightly, to get a foot in the homeownership door.
That is why programs such as the State Government’s Keystart low deposit home loans are an important pathway for many first and subsequent homebuyers in WA.
Keystart allows eligible applicants to access finance with as low as a two per cent deposit, as compared to the average 20 per cent required from other institutional lenders if you want to avoid mortgage insurance and other associated costs.
Currently it takes approximately four or five years for a couple on an average income to save enough for a standard home deposit. This can seem like a huge length of time and, for many, it will take significantly longer.
Given these challenges, UDIA was extremely supportive of the State Government’s announcement late last year that it would extend the Keystart loan book by $420.9 million. This will allow more people to access the finance they need to secure their own home.
UDIA has also been advocating for the further expansion of the eligibility criteria associated with accessing a Keystart loan so more people have the opportunity to access the service.
Currently the income limit is $90,000 for singles living in Perth, $115,000 for couples and $135,000 for families.
Given the median house price in Perth is $510,000, we believe it would be prudent to increase those limits to allow more homebuyers on moderate incomes access to finance that is increasingly difficult to get through the big banks.
The First Home Owner Grant is also available to eligible applicants seeking further assistance to purchase a residential home.
This is where it is extremely beneficial to consider purchasing a new home, as the grant is only available to those buying or building new.
The new house and land market provides a range of housing choices for new homebuyers in inner, middle, outer and regional areas.
Developers are continuing to diversify the housing product available to buyers, from traditional larger homes through to townhouses, units and apartments that are close to public transport and other essential services and amenities.