MIRVAC’S new rent-to-buy initiative at its Claremont Oval development aims to help aspiring home buyers get a foot on the property ladder.
The trial program, which will initially be available to 10 buyers, eliminates the need to save a deposit, which is one of the largest barriers to home ownership.
Buyers will enter into an option to buy and lease an apartment, paying a minimum 2.5 per cent option fee.
They will live in the apartment for up two years, making fortnightly rental payments and saving towards the required deposit.
Should they choose to buy the home at the end of the two-year period, the option fee and rental payments will go towards the deposit and stamp duty and the buyer will enter into a final purchase agreement under normal finance conditions.
General manager residential development WA Paige Walker said the initiative was an important part of Mirvac’s commitment to introduce practical and achievable steps to decrease the barriers to home ownership.
“As a major Australian property developer, we need to explore innovative ways to help make home ownership more achievable,” she said.
“Saving a deposit is the biggest hurdle to home ownership, especially whilst paying rent, so enabling the purchaser to move into their apartment and pay rent that converts to their deposit and stamp duty is a huge help to ultimately purchasing the apartment.”
Rent-to-buy arrangements are common in the US and Europe, but relatively unknown in Australia, although Ms Walker said they were gaining some traction with the State Government initiative Opening Doors, and Apartments WA, both offering a version of the scheme locally.
The initiative has received industry support.
Property Council executive director Sandra Brewer said it was a positive move.
“It’s pleasing to see property developers providing a service to their buyers which enables them to get into their own home sooner,” she said.
“This initiative presents a real innovation in the property market and is bound to be popular with young people wanting to live close to desirable amenities in Claremont.”
WA Apartment Advocacy director Sam Reece said providing housing choices in every suburb was vital for the development of Perth, and providing options such as rent-to-buy that facilitated apartment ownership was a very positive and welcome step.
Ms Walker said the initiative would be carefully managed, secure and equitable.
Under the terms of the arrangement, buyers must prove their ability to pay the fortnightly rental installments and meet pre-approval qualifications for the mortgage that will commence once the deposit has been saved.
To further assist financially, rent-to-buy purchasers will not be required to pay strata payments and council rates during their rental period and Mirvac will waive the requirement for a rental bond, leaving purchasers responsible for just their utility payments.
“We think the rent-to-buy option at Claremont is a great way to help potential purchasers find a way into the property market – getting them off the rental treadmill so they can start creating the lifestyle they aspire to,” Ms Walker said.
“Whatever stage of life they may be in – young first-home buyer, re-establishing after changed circumstances, a family unit or downsizing from a rented family home – the rent-to-buy option helps make home ownership more achievable.”
For more information go to www.claremont.mirvac.com, call 0466 494 527 or visit the sales centre at apartment B111, 6 Graylands Road, Claremont.