In Western Australia we are facing skills shortages across a range of industries, with the housing and construction industries being some of the hardest hit.
Combined with increasing property prices and almost no vacancy in the rental market, a shortage of affordable housing in Western Australia is an issue for many consumers.
There isn’t an overnight solution for any of us in the industry, but at Keystart we continue to support the State’s housing ecosystem, maintaining access to finance for affordable housing opportunities for Western Australians.
Applications for new loans have fallen in recent months following the boom in interest driven by state and federal government grants for new homes and low interest rates. However, this has stabilised and new enquiries at the start of 2022 have been strong.
What has changed is a shift from new builds to established homes, a natural reaction from consumers as completion times for new construction have pushed out. Despite ongoing support for new construction through the First Home Owner Grant, many Western Australians would prefer to buy an established home to allow them to get into the market sooner.
As competition to secure established homes increases, with selling days and listing numbers at five-year lows, we have continued to focus on ensuring the process runs smoothly for our customers. At Keystart, we are very much committed to ensuring customers are ready to make their home ownership dreams come true when they find their home!
Keystart's average conditional approval decision takes less than two days from the receipt of application, giving consumers the confidence to make an offer knowing how much they can afford. Turnaround times from conditional approval to formal approval vary depending on the complexity of the application, but in most cases, the full process takes three to four weeks end-to-end.
Property purchase limits and income limits
Another way we are supporting those who need the most help is through our property purchase limits and income limits. These are unique features of the Keystart scheme and ensure that we focus our support on those Western Australians who find it harder to save for a deposit to meet a traditional lender’s home loan requirements.
|Region||Income limits||Property purchase price cap|
|Regional areas (excluding Kimberley and Pilbara)|
In July 2019, Keystart’s income limits were increased for families, singles, and couples. The increases have remained in place since and are due to be reviewed again by the middle of this year.
Similarly, our property purchase limits in Perth have historically been around the median house price. As this has risen over the last year, we have continued to monitor and work with the State Government to ensure our limits are appropriate for the current market, both in Perth, regional WA and in the Pilbara and Kimberley.
There is a lot of speculation about the likelihood of the Reserve Bank of Australia lifting official interest rates for the first time in over a decade. At a national level, there are about four million homeowners who have never experienced an interest rate rise (based on an average of 350,000 new homeowners each year). Being a transitional lender, at Keystart about 67% of our customers have been with us for less than 10 years, and so a majority of our customers will experience this shift for the first time.
The good news?
Under our lending policy, Keystart assesses the serviceability of a loan for every customer on the current interest rate plus a buffer, which at the moment is 3%. So, at the time we assess a loan, we know that customers can comfortably afford their repayments even when rates go up.