Two new policies are set to help one state’s recovering market to the point where one property expert has claimed that not only are there “green shoots” being observed, but there has been “fertiliser” placed on the market to cultivate further growth.
The combination of changes to Western Australia’s Keystart loan scheme from the state government and the First Home Loan Deposit Scheme announced by the Coalition and adapted by Labor are both set to create growth in the state’s market, according to Gemmill Homes’ managing director, Craig Gemmill.
The changes to Keystart, a state government-owned mortgage lender, will see the income limits temporarily increased for individuals from $90,000 to $105,000 and for couples from $115,000 to $130,000 from 1 July 2019 to 31 December 2019, before reverting to their current levels.
This, along with the First Home Loan Deposit Scheme, will allow Western Australia “to realise its potential”, according to Mr Gemmill.
“When we were talking about green shoots 12-18 months ago, we were probably being a bit premature or optimistic,” Mr Gemmill said.
“But now, not only do we have green shoots, we have a bit of fertiliser to put on the lawn too.
“These changes will create awareness and instil confidence in the real estate market. Growth is coming.”
Mr Gemmill also said that he feels now is a good time to enter the Western Australian property market due to house prices returning to 2006 levels.
“You just need to look at the realities here in Western Australia. WA has gone from 7 per cent to 2.3 per cent vacancy rates. There’s $70 billion of mining work, $20 billion of which has already started,” he said.
“All the signs are there of a real rebound. The upside outweighs any concern around negative equity. These changes will help WA bounce back again.
“We’re seeing an increase in inquires, increase in sales and an increase in land sales. We see the real data here at the coalface.”
In particular, Mr Gemmill said that these new policies would support fly-in fly-out workers and double-income workers.
“In the past, the fly-in fly-out workers and double-income workers were ineligible for Keystart and had to go to a bank, and the banks then wanted a 20 per cent deposit, which they couldn’t raise,” he said.
“By increasing the income limits, it allows these people, who are working hard to get into a new home, to actually do it.
“This policy is not aimed at dentists, doctors and lawyers. This is for hardworking Australians doing it tough. It is a massive help to those who needs it.”
He added that the First Home Buyer Deposit Scheme’s 5 per cent deposit and removal of lenders’ mortgage insurance will no longer prevent people from entering the property market.