Bidders sought to buy into Keystart

The state government expects to sell 40 per cent of the loan book for low-income finance provider Keystart in the second half of the year, with an expressions of interest campaign officially launched today.

Treasurer Mike Nahan announced earlier this year that Gresham Partners had been appointed as lead adviser to sell the loan book, which has a nominal value of around $1.6 billion.

Mr Nahan today said a shortlist of proponents would be finalised by the end of next month, with the sale to be completed in the second half of 2016.

Dr Nahan said the partial sale of Keystart’s loan book was an important part of the state government’s asset sales program.

“This also represents an important step in ensuring a sustainable future for the home loan program by reducing its reliance on government borrowings,” the treasurer said in a statement.

“There will be no change to the service levels or terms and conditions for existing Keystart customers and the transaction is not expected to impact upon Keystart’s existing interest rate setting policy, lending eligibility criteria or rigorous loan assessment process.”

Keystart was established by the state government in 1989 to provide low income earners the ability to own their own property, even if they cannot meet the requirements of the major banks.

Housing Minister Colin Holt said Keystart was an important plank in the state government’s affordable housing strategy, which has a target of providing 30,000 affordable homes for residents on low to moderate incomes by 2020.