The McGowan Labor Government will provide further economic support and introduce a targeted housing stimulus, to assist the local housing market and construction sector in Western Australia.
While the current housing market is creating opportunities for first home owners, banks have tightened their lending standards creating a barrier to some people realising their dream.
The McGowan Government initiative will help potential first home owners get around these barriers by temporarily relaxing Keystart criteria to allow more people into the scheme.
Keystart is a State Government-owned mortgage lender, helping home buyers who meet certain criteria purchase an owner occupied property in WA.
Keystart's existing income limits will increase by $15,000 for singles and couples and by $20,000 for families from July 1, 2019 to December 31, 2019, giving more people access to loans.* The income limits will revert to the current levels from January 1, 2020.
The initiative will provide a much needed boost to the construction industry, with modelling showing the targeted stimulus will translate into the construction of hundreds of new homes - providing a boost for the housing construction industry and generating WA jobs.
Importantly the changes are timely and sensible, helping industry get through what it expects to be the bottom of the construction cycle.
The temporary changes to income criteria follows the McGowan Government's $420 million extension of Keystart's loan book in December last year, boosting its lending capacity to
$4.8 billion.
In 2017-18, Keystart approved a total of 2,789 loans, with 2,169 loans for construction or newly constructed homes.
As stated by Premier Mark McGowan:
"My Government wants to help as many Western Australians as possible achieve the dream of home ownership.
"Keystart is one of WA's great success stories in housing affordability and it continues to help people become home owners where otherwise that might not be possible.
"The changes to the Keystart eligibility criteria will help drive new building activity and stimulate the State's economy."
As stated by Treasurer Ben Wyatt:
"New housing construction commencements have weakened due to a number of external contributing factors beyond our control, in particular due to the difficulty potential home buyers are having in accessing finance. This has impacted on employment in the WA construction industry in the past year
"It is clear that banks have become more cautious with lending in the wake of the Hayne Royal Commission, so we have implemented these temporary changes to make Keystart finance available to people who may have been unsuccessful in applying for a home loan with a bank.
"The State Government's $10,000 First Home Owners' Grant and discounted rates of stamp duty are also available to encourage eligible first home buyers to build a residential property."
As stated by Housing Minister Peter Tinley:
"Since it was established in 1989, Keystart has offered pathways to home ownership for low-to-moderate income earners who could not be serviced by conventional lenders and would likely remain in rental accommodation for the rest of their lives.
"The broadening of eligibility for Keystart finance will make home ownership accessible for many people who thought it would be unachievable.
"About three quarters of Keystart loan approvals are for the construction of a new dwelling so these changes will also stimulate the building industry through new housing supply."
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| Income and property purchase price limits | | | |
| Region | Current income limit | Income limit July 1 to December 31, 2019 | Property purchase price caps |
| Metropolitan area | $90,000 (Singles) | $105,000 (Singles) | $480,000 |
| | $115,000 (Couples) | $130,000 (Couples) | |
| | $135,000 (Families) | $155,000 (Families) | |
| Regional areas (excluding Kimberley and Pilbara) | $110,000 (Singles) | $125,000 (Singles) | $500,000 |
| | $135,000 (Couples) | $150,000 (Couples) | |
| | $135,000 (Families) | $155,000 (Families) | |
| Kimberley | $120,000 (Singles) | $135,000 (Singles) | $650,000 |
| | $150,000 (Couples) | $165,000 (Couples) | |
| | $150,000 (Families) | $170,000 (Families) | |
| Pilbara | $150,000 (Singles) | $165,000 (Singles) | $650,000 |
| | $180,000 (Couples) | $195,000 (Couples) | |
| | $180,000 (Families) | $200,000 (Families) | |
Income limits will revert to the current levels from January 1, 2020.
