WA Business News

Industry groups have welcomed the state government’s move to increase the price limit for participants in the Keystart program, saying it should expand housing choice for low to middle income earners.

Housing Minster John Carey yesterday announced an increase to the price cap for Keystart home loan scheme to $560,000 for properties statewide.

The previous limits were $480,000 for metropolitan houses and $500,000 for regional areas.

The move came following pressure from industry to reduce barriers to entry to the scheme, as residential rental vacancies drop and house prices in Perth’s inner and middle suburbs climb.

Introduced in 1989, Keystart has helped more than 121,000 Western Australians buy a home.

According to CoreLogic’s recent home value index, Perth’s median house price is $560,000.

Urban Development Institute of Australia WA chief executive Tanya Steinbeck said the new limits were sensible given the current cost of housing.

“We are in a situation where critically low rental shortages are pushing up rents and making it even harder for potential homebuyers to save for a home loan deposit with a standard lender,” she said.

“Getting more people out of the rental trap and into home ownership via a Keystart loan is a win-win situation.

“It gets those who are seeking ownership onto the property ladder sooner and it frees up rental properties for those who need them.”

Ms Steinbeck added that Keystart was an important mechanism to assist potential homebuyers into ownership.

“We are currently seeing that the average price of a house is around $540,000 in broader Perth and values are much higher in inner and middle ring suburbs,” she said.

“If we are serious about offering people housing choice and getting more people to live in established areas, they need to be able to access these types of loans.”

Housing Industry Association of WA executive director Michael McGowan described the changes as an important step to ensure the Keystart purchase limits remained in step with the rising cost of construction.

“With a 40 per cent rise in the cost of construction over the past two years, the previous limits were making it challenging for homebuyers to get into the market,” he said.

“While new home sales have slowed over the past six months, we know there is still a significant demand for new homes and making home ownership more achievable is vitally important for the development of our state.”

Real Estate Institute of Western Australia chief executive Cath Hart also welcomed the changes.

“These changes to the Keystart property value thresholds are sensible and bring the maximum value in line with the median house price,” Ms Hart said.

“Keystart is a unique offering for Western Australians which helps more first homeowners get on the property ladder.

“Perth remains the most affordable capital city in Australia and the local market is proving to be robust in the face of eight consecutive interest rate rises.”

The move was also welcomed by land developers, including Nigel Satterley, who described the move as a “sensible change” that meant people could get into their homes sooner.

Read the full story here.