HomeStart writes decade-high volume of loans

HomeStart – the state government organisation providing home loans for South Australians – has revealed that it wrote 2,046 home loans in 2022–23, its largest volume over a decade.

The non-bank provides home loans to lower-income South Australians, enabling those with low deposits to access mortgages without being charged lenders mortgage insurance (LMI).

It aims to help those who may not qualify for home loans from traditional lenders into home ownership.

More than 1,000 loans were to single-income households – a 44 per cent increase on the previous year. The median customer income was $68,000.

According to the lender, its decade-high volume of loans was driven by strong demand from first home buyers (FHBs).

Amid rising interest rates and house prices, HomeStart provided 1,394 new loans to first home buyers, the highest number for a decade, and a 38 per cent increase on the 2022 financial year.

More than half of HomeStart borrowers were aged under 40 in FY23.

HomeStart chief executive Andrew Mills commented: “I’m delighted that HomeStart continued to make home ownership a reality for more South Australian first home buyers.

“It’s pleasing to support home buyers even while house prices, interest rates, and living costs are increasing.

“It’s also not only first home buyers we’re helping, but an increasing number of South Australians re-entering the housing market.

“Our ability to convert renters into home owners, particularly into new affordable housing, is also helping ease pressure on the rental market.”

Over the past 33 years, HomeStart has helped more than 83,000 South Australians into home ownership.

The figures came as the Malinauskas government moved to abolish stamp duty for FHBs buying or building a new home up to a value of $650,000.

HomeStart reports that inquiries for new loans in the weeks following the stamp duty announcement increased by more than 50 per cent.

South Australia state Treasurer Stephen Mullighan welcomed the news, stating: “Everyone deserves secure and affordable housing and the Malinauskas government is doing everything it can to keep the dream alive.

“Low deposit loans through HomeStart are making a real difference, helping lower-income South Australians achieve the home ownership dream, even while interest rates are increasing.

“We know for many young South Australians home ownership has never felt further from reach; HomeStart is helping to get it back within their grasp.”

The Malinauskas government has been focused on boosting housing supply and affordability, recently.

Its June state budget included a $474.7 million housing package to support the delivery of 3,600 new homes over five years and reduce the cost of housing for around a further 14,000 new homes, including abolishing stamp duty for first home buyers on new homes valued up to $650,000.

[Related: SA abolishes stamp duty for FHBs buying new homes]