Low-income Western Australian homebuyers are now able to purchase properties by sharing 30% of the capital with the Department of Housing and borrow the balance through state lender KeyStart Home Loans.
The shared equity model called Shared Home Ownership features a SharedStart loan option for potential homeowners who are finding difficulty in affording properties due to soaring prices, reports The Property Observer.
The scheme also encourages the homebuyer to eventually purchase the department’s share to make the dream of full home ownership come true. This is made possible because the ownership model is not similar to others where the government retains a permanent interest in the property.
It was developed to respond to the increased demand for affordable housing as rents were becoming too expensive in Western Australia, said Adrian Warner, acting director of strategy and policy at the Department of Housing.
“In the March quarter of 2014, the median rent reached $460 in Perth, while the median house price increased to $540,000, up from $525,000 in the previous quarter,” he said.
To date, the scheme has allowed the delivery of home ownership to more than 700 low-income households. This homeownership program, however, is not applicable to the lowest socio-economic groups because it still relies on regular income to pay off the mortgage made.
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