WA apartment loan scheme expanded

Western Australia’s home loan pilot for apartment purchases, Urban Connect Home Loan, has been expanded to include one-bedroom apartments.

First launched last year, the Urban Connect Home Loan offers borrowers the ability to purchase apartments in medium- and high-density developments, close to transport hubs and in urban locations across 189 suburbs in the greater Perth area.

The initiative is being delivered by low-deposit lender Keystart and aims to make medium- and high-density living more accessible and help make property ownership easier for Western Australians.

It does this by offering mortgages to eligible borrowers seeking to buy off-the-plan, new and established apartments with a deposit of as little as 2 per cent, without having to pay lender’s mortgage insurance.

While the offering originally only covered off-the-plan, new and established apartments with a minimum of two bedrooms in a complex of two storeys or more, the criteria has now been expanded to one-bedroom apartments.

It is only for apartments in the inner metro region or near selected rail transport hubs.

As with the original offering, the Urban Connect Home Loan is means-tested. It is available for singles earning up to $180,000 a year to purchase an apartment up to $560,000 or couples and families with a combined income of up to $200,000 a year, with a purchase limit of $650,000.

Speaking of the expansion earlier this month, Western Australia Premier Mark McGowan said the state government was “assisting more Western Australians to achieve their home ownership goals through changes to Keystart’s Urban Connect Home Loan, making more dwellings eligible”.

A new Keystart Loan Program will also be introduced to enable customers to secure pre-sale, off-the-plan properties.

The Urban Connect Home Loan will include deposit funding for off-the-plan apartments (though details aren’t expected to be released until next month).

Speaking of the expansion, Keystart said that it “recognises that saving for a deposit can be a significant hurdle to home ownership.

“With the expansion of off-the-plan deposits, we hope to open up greater choices in housing and another path to home ownership.”

The Western Australian government has been spending a record amount on social housing and homelessness measures recently and announced that it would extend and expand its existing transfer duty rebate for off-the-plan purchases as part of major funding commitments unveiled in the 2023–24 State Budget to boost housing supply and choice across Western Australia.

The state government will spend $33 million to extend the existing off-the-plan transfer duty rebate to 30 June 2025, convert the rebate to a legislated duty concession and increase the thresholds to:

• a 100 per cent duty concession for properties valued up to $650,000 (formerly $500,000); and
• phasing down to a 50 per cent duty concession for properties valued over $750,000 (formerly $600,000).

This cut in transfer duty aims to act as an incentive to build new apartments and boost housing at the “affordable end of the market” while adding “density and vibrancy to urban areas”.

It will also provide more opportunities for Western Australians to downsize or buy their first home, according to Housing Minister John Carey.

He stated last week: “The McGowan government continues to deliver record investments to boost housing supply, particularly for those who need it most...

“As Housing and Lands Minister, I am working to ensure the government is using every possible lever to bolster the supply of housing and lands, while delivering and supporting innovative homelessness reforms.

“Since making our record investment in social housing and homelessness measures, we’ve added more than 1,200 social homes, with more than 1,000 under contract or construction.

“Our investments in social housing and WA’s critical residential construction workforce will continue to deliver a pipeline of work — and speed up delivery of new dwellings — across the state, supporting Western Australian jobs and local businesses.

“We’re also delivering a range of tax reforms and incentives to boost housing and land supply, encourage urban infill and improve housing affordability.”

[Related: WA launches home loan pilot for apartment purchases]