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The McGowan Labor government has announced a low-deposit mortgage pilot that enables Western Australian residents to purchase two-or-more bedroom apartment purchases.
The Urban Connect Home Loan, delivered by low-deposit lender Keystart, will offer 300 borrowers the ability to purchase apartments in medium and high-density developments, close to transport hubs and in urban locations across 189 suburbs in the greater Perth area.
The “first of its kind” loan pilot is specifically designed to make medium and high-density living more accessible and help make property ownership easier for Western Australians.
Keystart will offer loans to eligible borrowers seeking to buy off-the-plan, new and established apartments (with a minimum of two bedrooms in a complex of two storeys or more) with deposits as low as 2 per cent, and without having to pay lender’s mortgage insurance.
Income and property purchase limits for the Urban Connect Home Loan are a sole income of $180,000 for singles with a property purchase limit of up to $550,000, and combined income of $200,000 for couples and families with a property purchase limit of up to $650,000.
The pilot will run for two years and be capped at 300 loans.
The Western Australian government-backed lender will start accepting Urban Connect Home Loan applications from 25 July, with expressions of interest from eligible Western Australian residents being accepted from Wednesday (13 July).
While the pilot will initially only be running through Keystart, it is expected that the product will eventually be made available to the broker channel.
‘Delivering more affordable housing options for Western Australians near key public transport locations’
The Premier of Western Australia, Mark McGowan, commented: “My government continues to deliver reforms and initiatives that support more affordable housing to get people into homes while ensuring there are further incentives for urban infill.
“The WA economy continues to outperform the rest of the country and it’s initiatives like these that support the significant pipeline of work into the future, keeping people in jobs and attracting more people to WA,” he said.
Planning Minister Rita Saffioti said that the Urban Connect Home Loan was about delivering “greater housing diversity in urban infill areas, particularly around our key transport corridors”.
“We want to see thriving communities close to our key public transport hubs and this new home loan will help drive that,” she said.
“By having higher property price and income limits, we’re ensuring more people can access medium and high-density homes in locations close to public transport, including our METRONET precincts.”
Housing Minister John Carey added that Keystart’s Urban Connect Home Loan would support medium and high-density living while “creating and delivering more affordable housing options for Western Australians near key public transport locations and amenities.”
Mr Carey noted the state government was also delivering a range of tax reforms and incentives to boost housing and land supply, encourage urban infill and improving housing affordability across the state.
Keystart chief executive Paul Graham welcomed the new product to Keystart’s home loan offering, adding: “The Urban Connect pilot is going to give us really valuable insight into the long-term need for a product like this in Western Australia.
“We know that saving for a deposit to secure finance is the biggest barrier to home ownership for most people and is usually being saved simultaneously to people paying rent,” he said.
“Keystart’s low deposit home loans help people get their foot on the property ladder sooner and start building equity instead of paying rent, and we’re seeing a growing need for this type of assistance across more demographics and property types.
“By making home ownership more accessible to Western Australians, especially in urban areas and locations close to transport infrastructure, we can support infill targets and contribute to vibrant and engaged communities around greater Perth.”
Other initiatives Western Australia has committed to that support more housing across Western Australia and further incentives for urban infill include:
- Fifty per cent land tax concession for new build-to-rent projects commencing July 1, 2023
- Stamp duty rebate of up to 100 per cent for eligible off-the-plan apartment purchases
- Planning reforms to include density bonus for private projects that includes 5 per cent social housing
- New and updated Keystart loan products helping more Western Australians access housing finance