A new Keystart product has opened the state scheme to a cohort of wealthier Western Australians.
Since when is someone earning a salary of $180,000 per year in need of government assistance to buy a two-bedroom apartment in Perth?
Since July 13.
Under what’s been called the Urban Connect Home Loan, individuals currently in the top 5 per cent of the nation’s income earners are being given a leg-up by the Western Australian government to help put a roof over their heads.
The party of the working class is digging deep into the taxpayers’ bank to help the upper middle class, while the state is in the middle of a homelessness and rental affordability crisis.
“We’ve launched a new Keystart product, and that’s to ensure that there is easier access to finance to obtain an apartment, a two-bedroom apartment in proximity to train stations, the CBD and Perth,” Premier Mark McGowan said.
Isn’t Keystart the government-owned agency established to help struggling people and families who would normally be unable to afford a home?
It is according to a McGowan government media release celebrating Keystart’s 30th anniversary in 2019.
“The ability to access affordable housing lies at the heart of the great Australian dream of home ownership,” the release read.
But now the mission statement of Keystart–which is to make that dream come true for more people– has been taken quite literally, and will include those earning $91 an hour, $692 a day, $3,461 a week, $15,000 a month and $180,000 a year.
“This is part of a package of initiatives that were announced to support housing choice,” Planning Minister Rita Saffioti said.
“Whether you’re a young person wanting to enter the housing market, an older person wanting to downsize or a family looking for a different way of living.”
She left out a very well-off person who wants to get a home loan with a 2 per cent per deposit so they can buy an apartment anywhere from Canning Vale to Carine or in between, like Northbridge, for example.
This policy will enable singles earning $180,000, or couples pulling in $200,000, to secure a two-or-more-bedroom apartment with a very low deposit rate and without having to cough up mortgage insurance.
There are 300 loans available and those eligible can choose any “urban” apartment valued at a maximum of $550,000 for singles and $650,000 for couples and families.
“We can afford to do this,” Housing Minister John Carey said.
“This is just another part of providing housing choice.”
Rubbish.
Those earning $180,000 have as much choice as they want when it comes to buying a home, especially if they’re in the market for an apartment.
When I punched the criteria for the government’s new Keystart loan into a real estate search site, the Perth metropolitan map looked like a tournament dart board.
West Leederville: $529,000 (including a gym, sauna and large swimming pool).
North Perth: $399,000.
Northbridge: $479,000, and so on. Apartments galore.
Let’s go back to some of those reasons Keystart was created in 1989.
“To help Western Australians buy a home when they are unable to secure financing from the private sector,” the Economic Regulation Authority said.
It’s worth pointing out that once a big earner is given a Keystart loan, the interest repayments are nothing spectacular.
Keystart takes the average variable rate of the big four banks.
The offering is currently 5.26 per cent.
When Keystart’s Paul Graham was asked why people on a $180,000 were eligible, he gave 6PR’s Oliver Peterson a rather ornate response.
“We’re trying to support more people to live closer to where they might be working, where they’ve grown up, where they’ve spent time with parents or just in the urban area,” Mr Graham said.
“We have to reflect that getting closer to the city, it costs a little bit more.”
Yes, it does.
But an apartment is still a very affordable and achievable option for someone raking in that much cash a year.
Before this month’s dramatic change of loan criteria, the maximum an individual could earn to secure Keystart finance was $105,000. And they could only get the money for a house worth up to $480,000, rather than an apartment.
It’s paradoxical.
Don’t forget, there’s already a 100 per cent stamp duty rebate when buying a property for $500,000 or less.
The real estate market remains very hot.
“This is all about the bigger picture,” Mr Carey said.
It seems more about a home loan assistance product for people who don’t need it.
No wonder the opposition said it “misses the mark”.
