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HomeStart, a lending institution based in South Australia, has reported a record-breaking year with more than 2,000 South Australians securing home purchases through its financing in the past year.
This marks a significant 33% increase compared to the average of the past decade and represents the highest number of loans since 2010, the SA government said in a news release.
The total value of financing for construction lending exceeded $220 million, and the institution granted 900 Graduate Loans for the 2022/23 financial year, with 430 of those taking advantage of the newly introduced 2% Graduate loan, the news release said.
One notable feature of HomeStart's loans is the low upfront deposit requirement, which helps reduce the time needed to save for the standard 20% deposit. Additionally, the institution does not mandate borrowers to purchase lenders mortgage insurance, which can add over $10,000 to the overall cost of buying a home. As a result, HomeStart has witnessed a 50% increase in online applications and a 40% increase in call volumes since the state budget, which included relief measures for first home buyers.
“We want South Australians to have the same opportunities for home ownership as their parents and grandparents,” said Stephen Mullighan (pictured above left), SA treasurer. “I’m proud the Malinauskas government has introduced significant changes to help keep the great Australian dream alive, including low deposit home loans through HomeStart, which are helping thousands of people enter the market. The suite of measures announced in the budget will help to boost housing supply and take some pressure off the tight rental market.”
In further efforts to support first home buyers, the Malinauskas government plans to launch a new 2% deposit home loan effective from July 1, 2024, specifically for eligible buyers who purchase or build a new property financed through HomeStart.
The government is also abolishing stamp duty for first home buyers on new homes valued up to $650,000 or vacant land up to $400,000 for building a new home. As part of a comprehensive $474.7 million housing package, South Australia has undertaken the largest single land release in the state's history and the first significant increase in public housing in a generation. These policies, aimed at increasing housing supply and affordability, have earned South Australia the top ranking on the national HIA Housing Scorecard for the second consecutive year.
First home buyers who meet the eligibility criteria can now benefit from stamp duty relief of nearly $30,000, in addition to a First Home Owner Grant payment of $15,000, resulting in a total relief package of nearly $45,000 from the state government. Stamp duty relief applies to contracts entered into from June 15 and is granted on the settlement date, with new home buyers expected to start receiving the relief later this month.
“We’re delighted to have helped more than 2,000 South Australians into their own home over the past year,” said HomeStart’s Andrew Mills (pictured above right). “The changes made by HomeStart to its lending products, including reducing the deposit requirement for our Graduate Loan to 2%, have unlocked home ownership for even more South Australians, alongside shared equity which is now used by almost one in four HomeStart customers. Further changes made in the recent state budget are already resulting in increased demand from first home buyers battling higher house prices, interest rates and living costs. We’re privileged to be supporting these homebuyers to turn their dreams into reality.”
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