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How property price can impact your home loan

The property market is subject to fluctuations. When the market is strong, the value of a home may be greater than the price originally paid, and greater than the loan amount borrowed to purchase the home.

State of the market

You will have heard of the terms, 'buyer's market' and 'seller's market'. When the market is slow, prices may be lower - making it a good time to buy. However, it can be difficult to know if the market is going to continue to drop or if it is on the way up.

If you are thinking of refinancing, buying your first home or selling your current home, it's useful to do some research about the state of the market.

Real Estate Institute of WA's interactive suburb map

Government authority Landgate has data on market trends and suburb prices.

Landgate market trends

Perth and WA market

The Perth property market, like the rest of Australia, experiences phases of growth and decline.

The good news is that according to REIWA's 2024 property market quarterly update, Perth house prices are set to grow 10% in 2024. It can be challenging to predict the market's direction. Stay informed and up-to-date with market trends by utilising resources such as REIWA's website and you'll be well prepared for any changes. 

Determine your home's value

With constant fluctuations in the property market, it's a good idea to get an accurate valuation of what your home is worth in the current market. 

You can obtain a valuation from a qualified valuer for a relatively small fee or a local real estate agent can provide an indicative value of your property free of charge. These valuations take into account similar sales in the area, the size of your home and any home improvements that may add value. 

Real Find an agent


Long term investment

Property is a long-term asset - meaning the returns on your home may take some time to grow. If you have a principal and interest loan, as you pay off your loan, the equity in your home will increase. Over time, your property may appreciate in value as the market strengthens, turning your home into a valuable asset. This cycle can take many years.

What is equity?

Equity is not an easy term and is not well understood.

In a simple equation, the equity in your home is the difference between your home's market value and your remaining loan balance.

Home value - Loan balance = Equity

  • Home value: based on the location and the size of your home, among other factors.
  • Loan balance: how much you owe. As you pay off more of your home loan, your loan balance will go down, eventually being fully paid off by the end of your loan term or sooner.
  • Equity: how much you owe. Your equity increases as the value of your home increases or as you pay off your home loan. 

Let's look at an example:

Say your home is estimated to be valued at $450,000 and your remaining home loan balance is $400,000. Then the estimated equity will be $50,000. To get this in percentage it's the $50,000 divided by the estimated home value of $450,000 and multiplied by 100. Resulting in 11.1%. 

20% equity goal

Remember, we are a transitional lender. We encourage you to refinance to another lender when you're ready.

Your goal with us is to reach 20% equity. When you reach the target you may be able to refinance to another lender who may offer lower interest rates and other benefits. 

Now, with the Keystart app, it's never been easier to calculate the equity in your home.

Download the Keystart app

Check in on your home's estimated value and your loan balance. The app helps you see when you may be able to refinance - and move on to another lender. 

Managing a shared ownership loan

Purchasing more shares in your home

We encourage you to purchase more shares in your home when you are in a position to do so. By purchasing more shares, you are reducing the Housing Authority's share of your home. You are moving towards managing a loan for 100% of your home.

You can purchase as many shares as you wish, with a minimum that you can opt to purchase at any one time is a 5% share.

If you decide to buy shares we will need to calculate what the Housing Authority's shares are worth for your home. We'll arrange for an independent property valuer to complete a valuation of your home so we can calculate this.

You don't have to buy more shares. We encourage you to buy more shares if it is suitable for you to do so, but you are not obliged to buy any further shares. Your share and the Housing Authority's share of your home has an impact if you wish to sell your home or refinance your loan.

Support through the process

As responsible lenders, we will provide support to you by considering any impacts this could have on you and your family. It's important to consider your financial situation before you purchase further shares, as you'll be increasing your loan amount with Keystart and, in turn, increasing your minimum monthly repayments.

We'll work with you to review your current income, any other debts you may have, your current expenses and the current value of your home. This will give you an indication as to whether or not purchasing further shares is suitable for you.

Even if a loan increase is not suitable for you at one time, this doesn't mean that you won't be able to do this in the future.