Rita Saffioti confident that Cook Government’s home equity scheme will address supply, not overheat market

West Australians looking to buy a home could have their deposits slashed to just two per cent under a new scheme rolled out by the Cook Government on Wednesday.

Up to 1000 low income earners will be able to access the $210 million Keystart Urban Connect Shared Equity, which will see the State Government take an equity share of up to 35 per cent in a bid to boost the number of property owners.

But Deputy Premier Rita Saffioti had to quickly attempt to quash concerns the scheme could bump up prices, on the back of projections Anthony Albanese’s first homebuyer plan will increase house prices across the nation buy up to five per cent.

Under the new scheme, those who earn less than $123,000 — or a total of $189,000 for couples — can apply for the two per cent deposit, with the WA Government taking a 35 per cent share of the equity.

It means a homebuyer purchasing an apartment for $700,000 would require a $9100 deposit and repay $3000 month, compared to a $140,000 deposit and $3380 each month.

Those selected could then have the option to purchase back the government’s share of the property.

It applies only to newly built apartments, townhouses, units or villas anywhere in the State.

Premier Roger Cook said the scheme would help encourage more construction of high-density projects.

“It’s a $210 million investment that will provide homeowners with lower upfront costs and mortgage and mortgage repayments,” he said.

“This is a major election commitment which we have now delivered.

“This is an important opportunity not only for young people to get a roof over their heads, to own a great home, but to increase housing supply and increase densities in our community to make sure that everyone has viable and sustainable communities in which to live.”

It follows a similar program announced by the Albanese Government in August — the Help to Buy Scheme — where the Federal Government takes up to an 40 per cent equity on new home purchases, 30 per cent for existing homes and reduced deposits to five per cent.

The initiative, which officially kicked in last week, has been widely slammed by leading industry experts and real estate agents, who predict it will make prices surge by about five per cent, with many stating it was already impacting the market.

Ms Saffioti quashed concerns the scheme could bump up prices, arguing it was targeting supply.

“This is very much about supply, as much as demand,” she said.

“This product is targeted for product that’s off-the-plan, under-construction or newly completed and not yet lived in so this is all about encouraging supply.”

Ms Saffioti also said the scheme was focused on helping low-income home buyers.

“In relation to the new builds, the majority of this product was under that market so we’re very much targeting the affordable product,” she said.

“For example, a one by one in this apartment building is around just over $500,000 and a two by two, not on the top floor, but further down is less than $730,000 so this is very much targeted at increasing supply.”