More low- to middle-income earners in Western Australia will be able to qualify for low-deposit home loans after the state government's adjustments to Keystart’s income limits took effect this month.
The changes will see income thresholds expanding — single homebuyers with incomes of up to $105,000, couples with a combined annual salary of $130,000, and families earning $155,000 would now be able to qualify for Keystart, a state-sponsored home-loan program with low deposit requirements. The changes will only last until the end of the year.
"Following the announcement in May that the income limits for eligibility for a Keystart loan would be increased, there has been a significant upsurge in interest from potential home buyers, showing just how much the credit crunch has impacted sentiment in Western Australia," Cath Hart, executive director of Housing Industry Association, said.
Hart said Keystart has been providing homeownership opportunities in the state for almost three decades now, adding that the changes would continue to assist many would-be homebuyers. The increased in homebuyer activity, he believes, could create flows onto the broader economy.
"We are pleased that government has responded to the needs of industry and the home buying public by broadening access to Keystart loans and we look forward to seeing the benefits flow through as the changes take effect," he said.
However, would this boost help homebuyers in Western Australia break into Perth's central suburbs? Prices in the capital city fell by 0.7% over the past month, figures from CoreLogic show. Prices in the city are now down to 19.5% from their peak in 2014.
"Even so, if newly eligible Keystarters want to buy into central Perth, their options remain strictly limited," market watcher Emma Young said in an analysis in WA Today.
In fact, figures from the Real Estate Institute of Western Australia show that only 40% of Perth's 300-odd residential suburbs have median house prices below $480,000. Some affordable suburbs are located in the urban fringe.
Nevertheless, market experts, like Urban Development Institute of WA chief executive Tanya Steinbeck, still commended the changes.
"It is encouraging that the state government has recognised the increased difficulties that buyers, particularly first-home buyers, are facing in getting their foot in the housing market door," Steinbeck said. "It is positive to see the 75% surge in enquiries to Keystart, with the loan applications coming from the desired cohort of buyers."
Collections: Mortgage News