The Real Estate Institute of Western Australia has warned the state government against any moves to privatise Keystart Home Loans.
The proposal to hand the public service organisation over to the private sector was one of several recommendations by the Economic Regulation Authority announced this week.
REIWA president David Airey said Keystart was an excellent contributor to the housing market and must not be ‘messed with’.
“In particular, Keystart helps thousands of Western Australians get into their first home and out of the rental system,” Mr Airey said.
“Its services are targeted at people on low and fixed incomes and it plays a vital role in helping people with affordability and access to finance,” he said.
Keystart was established in 1989 and is wholly-owned by the Department of Housing. It can be used to buy an established home or to fund the purchase of a block of land and construction contract.
“Its services are available to all West Australian home buyers who meet their criteria and it’s not just for first home buyers; they can also assist eligible home buyers with subsequent purchases as well as helping some rural business owners and farmers with obtaining finance for either their dependants or their employees,” Mr Airey said.
“This is not a role suited to the private sector and specialised lending to people with modest means should remain a government service to help with a stable housing market and with social equity,” he said.
Mr Airey said the first home buyer’s market had been very strong over the last two years but was now trending down.
“Affordability is the main issue for those trying to get a foot on the property ladder, but the combination of low interest rates, stamp duty exemptions and the First Home Owners Grant is behind the recent surge,” he said.
“However, these conditions will not always be in place and a strong, government-backed Keystart is needed to bolster the lower quartile of the housing market.”
Mr Airey said that real estate agents often worked with Keystart clients to help them into home ownership.
“The value to the community of this state-owned organisation cannot be underestimated,” he said.