The managing director of a property group is calling on the Western Australian government to help the struggling housing market in the state.
Craig Gemmill, from Gemmill Homes, met with the WA housing minister Peter Tinley recently to outline his plan.
He is pushing for a substantial increase to the first home owners grant provided by the government, which currently sits at $10,000, as well as changes to the Keystart scheme.
Gemmill said, “Minister Tinley was very receptive to our ideas, and I know the government is trying to balance the books and bring it back to surplus, but I’d love to see the grant raised to $15,000, better yet even $20,000.
“The government may be hesitant, but you can actually increase the first home owners grant and it won’t have an impact until next year’s budget.
“Given the delay in approvals and the set group of people who qualify, it ensures it is a manageable increase for the government.”
The Keystart low deposit home loan was established to help Western Australians unable to meet the deposits required for a home loan from a mainstream bank.
Gemmill says tweaking the scheme could help spark the sluggish housing market in the state.
While there are signs emerging of the cycle turning back to positive, Gemmill says an injection is needed to get the state’s housing market truly firing.
“It is about confidence”, he added. “We need to instil confidence in the market here in Western Australia. We need to go out with a positive message and encourage buyers to get out there.
“You have to get people buying right now. There are some really good signs coming, but we really have to encourage these first home buyers to take advantage of the low prices and quicker build times.”
Gemmill said there were also other options worth exploring that can make life easier for those wanting to use both the First Home Owners grant and Keystart method.
One change he suggested was that Keystart recognise higher income limits. Currently it only recognises 30% of regular overtime, whereas banks will recognise 80% when assessing a home loan application.
Another change was less restrictive lending. He said Keystart does not allow more than 10% of a borrower’s income to go to an existing debt, such as car loans.
Finally, he said recent changes by the government to Keystart has seen couples borrowing $50,000 to $60,000 less than previously.
Gemmill said he is happy to put his own money where his mouth is, with Gemmill Homes set to introduce several initiatives in early 2019 to assist first-home buyers in their entry to the property market.
“This is a time when investors tend to come into the market, given the returns,” he said.
“They start buying up all the cheaper properties given the yields available. We need to ensure that the first home buyers are not shut out and they have a real opportunity to enter the market themselves.
“Through our Goodlife Homes business, we are looking at some packages and incentives that we will roll out in the new year to really ensure that first home buyers coming through can really get some traction in the WA market.
“We would love to see the government lend a hand as well, as it will make a huge difference.”