❓ Mrs. Stojkovski asks about support for Keystart customers facing hardship due to COVID-19. The Minister for Housing details Keystart's role in WA home ownership, increased lending capacity, and measures like interest payment deferrals.
AnsweredQoN 293Legislative Assembly
QuestionView source ↗
CORONAVIRUS —
KEYSTART CUSTOMERS
293. Mrs J.M.C. STOJKOVSKI to the Minister for Housing:
I refer to the McGowan government's
response to the impact of COVID-19 on Western Australian households. Can the
minister advise the house what the McGowan government is doing to ensure that
Keystart customers who are experiencing hardship due to COVID-19 are being
supported?
KEYSTART CUSTOMERS
293. Mrs J.M.C. STOJKOVSKI to the Minister for Housing:
I refer to the McGowan government's
response to the impact of COVID-19 on Western Australian households. Can the
minister advise the house what the McGowan government is doing to ensure that
Keystart customers who are experiencing hardship due to COVID-19 are being
supported?
AnswerView source ↗
I thank the member for Kingsley for
the question and for her enduring interest in ensuring that her electors are
apprised of the issues relating to affordable housing opportunities in her
electorate.
Keystart
provides a sparkling example of public policy done well. It was invented in
1989 by the then Labor government and has for more than 30 years
contributed to and supported Western Australians into home ownership. More than 104 000 Western Australians have been
beneficiaries of Keystart loans, which are low-deposit, high-documentation loans. That has created a circumstance in which we now find, during the
COVID-19 crisis that we are involved in, that Keystart is even more essential
to the housing and construction industry. I advise the house that for the year
to date, Keystart lending made up nearly 50 per cent of all first home owner
loans in Western Australia. Housing construction businesses are overwhelmingly
complimentary and understanding of the position that Keystart has in the
industry, ensuring its future viability. Without it, we shudder to think what
the industry would look like now and the jobs that would be leaking from that
industry into the unemployment list.
We have gone further. Since coming
to office, the McGowan Labor government has increased the borrowings of
Keystart by nearly $1 billion, taking it to $5.3 billion worth of lending. I advise
the house that about $4.8 billion in lending is out there now. We also
increased the income limits for a couple to $130 000 to put it even more within
reach. This was all pre-COVID-19 and in response to what the industry was
telling us about the challenges around the
five years of slow decline in the property cycle that we find ourselves in. We
also went further in making sure that Keystart was responsive to its
clientele and the nearly 20 000 active loans that are under management, and
that arrears and defaults are consistently in line, hopefully, with the
averages of its long-run history. I am pleased to report to the house that that
appears to be the case, although we will wait until the next quarter to
actually confirm that outcome.
In managing that, we made sure we
did not find too many distressed loans as a result of the consequences of
COVID-19 and the unemployment impacts. We found there was a requirement to move
resources internally and to retrain staff to move across to the risk section of
the agency, which would look after them. In doing so, we have created active
engagement with those at-risk loans and clients to ensure that they are
engaging with us early and coming up with alternative plans. One thing that the
government is very proud to announce is the fact that we will defer interest payments for up to six months on a particular
loan. Indeed, in normal hardship arrangements, we w ill waive the
interest fees. By way of example: even if it is deferred, a $350 000 loan over
a 30-year term equates to estimated repayments of around $10 600 over six
months, or $781 in savings to the household.
I am very happy to announce that
that has not been taken up in great numbers. I will report back to the house in
the fullness of time about the total impact that that might have on the revenue
source from Keystart. In this way, we are able to support the construction
industry and ordinary Western Australians as they continue on the journey and
dream of home ownership.
the question and for her enduring interest in ensuring that her electors are
apprised of the issues relating to affordable housing opportunities in her
electorate.
Keystart
provides a sparkling example of public policy done well. It was invented in
1989 by the then Labor government and has for more than 30 years
contributed to and supported Western Australians into home ownership. More than 104 000 Western Australians have been
beneficiaries of Keystart loans, which are low-deposit, high-documentation loans. That has created a circumstance in which we now find, during the
COVID-19 crisis that we are involved in, that Keystart is even more essential
to the housing and construction industry. I advise the house that for the year
to date, Keystart lending made up nearly 50 per cent of all first home owner
loans in Western Australia. Housing construction businesses are overwhelmingly
complimentary and understanding of the position that Keystart has in the
industry, ensuring its future viability. Without it, we shudder to think what
the industry would look like now and the jobs that would be leaking from that
industry into the unemployment list.
We have gone further. Since coming
to office, the McGowan Labor government has increased the borrowings of
Keystart by nearly $1 billion, taking it to $5.3 billion worth of lending. I advise
the house that about $4.8 billion in lending is out there now. We also
increased the income limits for a couple to $130 000 to put it even more within
reach. This was all pre-COVID-19 and in response to what the industry was
telling us about the challenges around the
five years of slow decline in the property cycle that we find ourselves in. We
also went further in making sure that Keystart was responsive to its
clientele and the nearly 20 000 active loans that are under management, and
that arrears and defaults are consistently in line, hopefully, with the
averages of its long-run history. I am pleased to report to the house that that
appears to be the case, although we will wait until the next quarter to
actually confirm that outcome.
In managing that, we made sure we
did not find too many distressed loans as a result of the consequences of
COVID-19 and the unemployment impacts. We found there was a requirement to move
resources internally and to retrain staff to move across to the risk section of
the agency, which would look after them. In doing so, we have created active
engagement with those at-risk loans and clients to ensure that they are
engaging with us early and coming up with alternative plans. One thing that the
government is very proud to announce is the fact that we will defer interest payments for up to six months on a particular
loan. Indeed, in normal hardship arrangements, we w ill waive the
interest fees. By way of example: even if it is deferred, a $350 000 loan over
a 30-year term equates to estimated repayments of around $10 600 over six
months, or $781 in savings to the household.
I am very happy to announce that
that has not been taken up in great numbers. I will report back to the house in
the fullness of time about the total impact that that might have on the revenue
source from Keystart. In this way, we are able to support the construction
industry and ordinary Western Australians as they continue on the journey and
dream of home ownership.
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