WA Perth market 2018

But that funds established purchases as well right? So not really distorting the market to funnel people into new builds like the FHOG. I don't really know the scheme in detail.
From a state budget perspective however, prices have dropped so much at the bottom end of the market and housing is that much more affordable that I don't see Keystart being justified anymore. Like most government economic initiatives I suppose which start too late and hang around after they are no longer needed.

 

Actually, most Keystart loans fund new builds.


The building industry love it because it’s a state sponsored conveyor belt of new customers. No deposit? No worries, you can use the 10k we’re going to give you for a new build.


There are numerous examples of builders working with brokers targeting FHBs which source the finance from Keystart.


I think you will find that any attempt to scale back Keystart would be blocked by very powerful vested interests in the housing industry.

 

Keystart is for people that can't afford to save a deposit but can afford to pay rent. It helps to break the poverty cycle that sometimes runs through generations. I personally know a few people who benefited from Keystart to get into the property market. Interest rates are not competitive but it's the cost of doing business.

 

And yet, it offers loans to people on in what in no way could be considered a low income.


I am a single applicant earning a maximum household income of $90,000 p.a.

OR We are a couple earning a maximum household income of $110,000 p.a.

OR We are a family earning a maximum household income of $130,000 p.a.


https://www.keystart.com.au/uploads/page_assets/Brochure_Standard_Lending_DL_Oct_2012_web.pdf


A major rationale for Keystart is (or has become) to stimulate the WA building industry.

 

People on that level of income can just as easily go to a Bank for their FHB purchase. If Keystart are trying to get some of that cake, I say go for it. Keystart have other programs like shared-ownership and such.

Keystart is not cheap by any means, just relaxed on deposit requirements and no LMI. Servicing must still be met and by no means giving out loans to people who can't afford them.

 

They diversify their book by having better quality loans from higher earners. Understandable. But it gives lie to the assertion that they are only lending to people who’ cant afford to save a deposit’.


And as for the lending standards, it’s quite simple: if the loans were safe, the banks would write them. But banks are not that keen on writing 98-100% LVR loans these days.


Granted, it appears ( although who knows for sure they don’t publish financials) that the book has withstood the property bust but heaps of their loans will be in negative equity.


Remember, the loans had no equity in the first place.

 

In the last four years, rents have dropped 25% and entry level house prices dropped at least 15%. That's a rent saving of ~$5,000 per year and ~$5-10K less deposit required to get into their first house for your average family. Those numbers look pretty good for improved ability to save a deposit and meet serviceability requirements for a first mortgage through a mainstream bank, even with the tougher lending environment of late. First home buyers in Perth have not had it this good for 15+ years (which is a good thing); I'm not sure there is justification for much government assistance right now.

 

Again, I am pretty satisfied that the State Government is keeping this in place to keep the housing industry from collapsing entirely.


The grant plus Keystart is making a huge difference to their order book.


And let’s face it; they have a point.

 

Markets within markets springs to mind again today.
Just found out I was unsuccessful on a rental property in Wembley as another party offered more $$! Spoke with another agent about another rental in Wembley, she advised it has already been leased and that people were offering $60pw on top of the advertised price
Rents are certainly tightening in some areas

 

Interesting

One of my Yokine places is becoming vacant in a week or two. And so far it’s been very quiet at the home opens.
Looking like I’ll need to drop rents again.

Blacky

 

I think the blue chip suburbs are tightening as they also have started to grow in value or it could just be a Wembley thing!

 

Damn - that's disappointing.
I held off leasing one of my Highgate 1 bedroom townhouses as I had to wait for some warranty work and advertised it 2 weeks ago at $410 and it was snapped up. The others were gobbled up at $380 rising to $400 as they got taken and there was a bit of a bidding war so we decided to test the waters at $410. Bingo still snapped up.

 

Appears to be a lot of available stock around there.


Which is odd; I would have expected Yokine/Tuart Hill to tighten if Highgate is.

 

Is there a statistical reasoning for this?

 

That the areas close to the city fill up quicker than the ones further out?

 

I suspect it’s got some product component to it as mine was a one bedroom townhouse which is pretty rare

 

I think it has more to do with reduced rental listings in Highgate halving from 40 to 20, and that it's brand new.

Also rentals in tuart/joondanna especially the 3/4 bedroom townhouses are starting to be snapped up.

 

Also adding to this, the lease of my unit in North Perth was up recently and I was thinking I'd probably be asked to drop the rent again but instead my tenant offered to pay $5 a week more to stay. It's not much but took me by surprise anyway. Good surprise

 

Interesting.
What price point?

 

$450-$550/week mark, new stock getting asking price over $500/week but older 5-10 year stock still low to high $400/week... at least $100/week lower than peak, but they have moved past bottom at least.