17/09/2008 - 14:09

First homebuyer scheme suspended

17/09/2008 - 14:09

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First Start - the state government's shared equity scheme for first homebuyers - has been suspended indefinitely in a move that housing groups believe could threaten the already struggling sector, if the incoming Liberal government does not top up funding

First homebuyer scheme suspended

First Start - the state government's shared equity scheme for first homebuyers - has been suspended indefinitely in a move that housing groups believe could threaten the already struggling sector, if the incoming Liberal government does not top up funding.

A statement from the Department of Housing and Works said the program's allocated budget of $300 million had been met, in approved and pre-approved loans, forcing the agency to suspend the scheme until discussions could be held with the new government.

According to the Real Estate Institute of Western Australia, the decision could impact on both the established and new housing sectors.

"The suspension of the scheme is a blow to potential first homebuyers and to the market in general, but it's really been a victim of its own success," said REIWA president Rob Druitt.

"The incoming Barnett Government will need to either expand the scheme with more funds or look to alternative strategies to help with affordability."

Mr Druitt said one option for the new government was to use funds from the proposed 'Royalties to the Regions' scheme to assist first homebuyers in regional areas like Broome, Karratha, Newman and Port Hedland.

"This, in turn, would mean there are more shared equity scheme funds available for metropolitan buyers," he said.

Housing Industry Association (WA) spokesperson Steven Gill said the organisation was disappointed the program had been suspended.

"Keystart and the shared equity scheme have underpinned the recovery in the first homebuyer segment of the market, and we are very concerned about the uncertainty over the program," he said.

"We have been seeking a commitment from both sides of politics to protect and top up the funding."

First Start, which was introduced in February 2007, is a shared equity scheme between the state government and first homebuyers for properties valued at up to $375,000.

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