Bankwest has announced it support for the Western Australian housing market’s move to introduce an additional progress payment for the delivery of off-site constructed, modular properties for home buyers in Western Australia.
“Bankwest strives to be a simple, easy bank for Australian homeowners, and we believe this is a valuable change for customers and builders alike,” said Peter Bouhlas (pictured), Bankwest’s general manager products and digital services.
The decision followed ongoing conversations with the Housing Industry Association WA regarding opportunities to remove the barriers in home buying as well as support the supply of new homes.
“Labour and supply shortages that took hold during the global pandemic continue to create challenges for the WA property market and it’s not uncommon to experience construction delays of about two years,” Bouhlas said.
“Modular constructions make them an appealing option for aspiring homeowners who could cut those delays to about 20 weeks, but the inability for companies to cover their construction costs has been a significant barrier.”
Modular homes, which are also known as prefabricated kit or transportable properties, are homes that are constructed away from purchased land to be delivered to the site for installation and connection to utility services.
“Over the past three years we’ve seen more builders and consumers turn to alternative methods of construction to deliver housing faster,” said Michael McGowan, Housing Industry Association executive director – WA.
“Modular construction has been well known to the WA public for a long time, stereotypically as a donga on a mine site, but more recently this stereotype has changed and modular construction is now a quality produzct offering.”
The challenge that came with such homes was the structure of progress payments to construction companies, which usually involved deposit and completion. The expenses that come with the upfront construction may result in the cancellation of contracts and impede the construction method that could be desirable for customers in the market.
Bankwest moved to solve such problems through an adjustment in policies, which will allow customers to authorise an additional payment stage for up to 95% of the value of the land, or 90% for investment loans. The additional progress payment will be available for applications without lenders mortgage insurance along with a loan-to-value ratio that will be equal to or be lower than 80%.
“Bankwest’s additional progress payment for modular homes reduces the barrier, ensuring funding flows to constructors that have also experienced significant turbulence, and customers move into their homes sooner,” Bouhlas said.
“We’ll continue to work closely with government, industry, and community leaders to explore every opportunity to remove barriers to home buying and support the rapid supply of new homes in Western Australia.”
