West Australians need affordable housing, not high-risk debt – Greens

Western Australia Senator Scott Ludlam warned today that a new loan deal enabling home buyers to borrow with only a three percent deposit would create debt problems and do little to solve the affordable housing crisis. 

Senator Ludlam, the Australian Greens housing spokesperson, said Western Australians needed affordable housing, rather than risky debt.

“Bankwest is proposing home loans for 97% of the property value. While they claim this will reduce the average saving time for first homebuyers from four years to six months, it will also see a significant increase in the size of mortgages.

“WA Housing Minister Troy Buswell describes this as a ‘new weapon in the housing affordability battle’ - I have to say this weapon is way off target.

“There are many measures that would increase the amount of affordable housing available to people – expanding the National Rental Affordability Scheme, reforming the tax system, introducing the Greens’ Convert To Rent program and building more public housing. Allowing people to take on bigger debts, after apparently saving for only six months, is not the answer.”

Lynn MacLaren MLC, Greens WA spokesperson for housing, said Minister Buswell was misguided in comparing the proposed loans to the State Government’s Keystart program.

“The Keystart Home Loan scheme is a much more responsible way to help lower income earners. It requires a minimum four per cent deposit and has a strict maximum loan and property value limit. It also has a relatively small default rate compared to traditional loans.

“The Keystart Shared Equity scheme is a shared equity scheme –the State Government basically shares the loan and equity with the borrower, with the borrower only taking on 70% of the debt, and the government always owning 30% of the equity.

“In the case of the proposed Bankwest loans, the debt – 97% of the property’s price – will be on the head of the borrower alone.”