The State government has launched a shared equity scheme to make housing more affordable for first homebuyers on low incomes.
The State government has launched a shared equity scheme to make housing more affordable for first homebuyers on low incomes.
Premier Alan Carpenter said the scheme would be one of several initiatives designed to boost housing affordability. Its launch follows criticism of the government for failing to immediately offer tax relief for hombuyers.
The shared equity scheme involves the Department of Housing and Works purchasing a share in the property and providing the homebuyer with a Keystart low-deposit loan to purchase the remaining share.
It applies to families with incomes under $60,000 and singles with incomes under $35,000.
The scheme won early support from Master Builders Association of WA Housing Director Gavan Forster, who said the plan was a logical response to the problem of housing affordability for first home-buyers, but needed to be supplemented by lower stamp duty and a revamped First Home Owners Scheme.
The full text of an announcement from the Premier's office is pasted below
The State Government today launched an innovative home loan initiative that will assist 3,000 Western Australian families to own their own home.
Premier Alan Carpenter said the $300 million First Start program was a shared equity scheme, aimed at helping first homebuyers on lower to moderate incomes to realise their dream of owning their own homes.
"The property boom and interest rate increases have combined to make the great Australian dream of owning your own home very difficult, particularly for struggling WA families," Mr Carpenter said.
"The First Start scheme is designed to make this dream more attainable and is one of a series of measures the State Government will be implementing to help address housing affordability and land supply in WA."
The scheme is based on the Department of Housing and Works purchasing a share in the property and then providing the homebuyer with a Keystart low-deposit loan to purchase the remaining share.
The department will purchase:
- up to 40 per cent for families with incomes under $60,000;
- up to 30 per cent for couples with incomes under $50,000; and
- up to 30 per cent for singles with incomes under $35,000.
Homebuyers will purchase the department's share of the property as their finances permit. The maximum property price will be $365,000. First Start borrowers must be owner-occupiers and qualify for the First Home Owner's Grant.
The Premier said the scheme would be offered across the State and would have the capacity to assist 1,000 households a year for the next three years.
"Shared equity home loans are increasingly becoming recognised as a solution to housing affordability," he said.
Mr Carpenter said First Start would also provide homebuyers with on-going support.
"We have put in place a safety net to assist borrowers should their circumstances change," he said.
"This includes reduced payments for up to six months in situations where the borrower's income has reduced, for example due to unemployment."
The Premier said to ensure the success of First Start, the department would make available a significant number of affordable properties in metropolitan and regional areas, through its New Living Scheme.
In addition, more affordable house and land packages would become available through developments with the department's joint venture partners.
"Of the 1,000 loans in the first year, 500 will be targeted to purchasers of affordable properties through the department, while the remaining 500 loans will be used to purchase house and land packages or established homes from the private sector,"
Mr Carpenter said.
"First Start will also provide a powerful incentive for the private sector to develop more affordable land and home packages with support from the department.
"To serve as a guide for the private sector, the department has already produced two display homes in its Banksia Grove development which can be duplicated in the current market for below $365,000."
The Premier said First Start was the latest addition to a range of existing State Government housing affordability schemes including:
- Keystart low deposit loan scheme - loans to purchase 100 per cent of a property, with more than 60,000 loans provided since its inception in 1989;
- Goodstart Shared Equity Scheme - a low deposit shared equity loan scheme, targeted at departmental public housing tenants and applicants for rental;
- Aboriginal Home Ownership Scheme - a low deposit shared equity loan scheme to assist Aboriginal people into home ownership;
- Access Scheme for people with disabilities - a low deposit shared equity loan scheme to assist people with disabilities into home ownership;
- Sole Parent loan Scheme - a low deposit shared equity loan scheme to assist families who have experienced a relationship break down and a resulting drop in income retain the family home; and
- Restart Scheme - a low deposit loan scheme to assist families who have experienced a drop in income as a result of temporary job loss or change in job retain their family home.
The First Start program commences immediately, with further information available by calling 9338 3208 for metropolitan callers and 1300 720 855 for country callers.
