The state has a new plan from rent to purchase

A state is ready to provide renters with new home ownership pathways through plans to leverage new buildings.

The South Australian government has launched a Rent-purchased affordable housing program that will allow long-term renters to buy one of 100 new homes currently under construction.

Announced as part of the state budget, the initiative will assist long-term renters and key workers working to break into the real estate market.

SA’s Secretary of Housing and Urban Development Nick Champion calls it an opportunity to “get out of the rental roundabout.”

“We know that safe and affordable housing is essential to a strong community and a thriving economy, and through this program, we are investing in the well-being and stability of our state’s families,” he said.

Rent-to-buy (also known as rent-to-rent) usually involves a lease agreement that gives tenants the option to have previously purchased the property at a previous price once the lease is completed.

The new plan will allow long-term renters to purchase one of 100 new homes being built. Image: Getty

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Although it is not a new concept for Australia, it has seen new iterations over the past few years.

An example is a model for building a lease that sees new homes built specifically for tenants to have the opportunity to buy real estate once the lease is over.

The developer assembly has made significant progress in the field through its Kensington project in Melbourne, with rent and purchase prices fixed for five years.

Although it has gained appeal, some states have introduced new laws to ban certain changes to the model. For example, Victoria prohibits most rents to buy agreements unless they are made by Victoria’s homes, registered housing associations, or the arrangement meets the requirements set out in the provisions.

In the case of SA, rent purchases can only be made available by the South Australian Housing Trust, which is how the program is provided.

How will the program work in South Australia?

Under the plan, homes will be rented out to qualified renters for three years at 75% of market rent.

Rent purchases allow tenants to rent real estate and have the option to purchase the property at a pre-limited price. Image: Getty

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To qualify, the tenant must be a SA resident, rented for at least 24 months, currently do not own the property and meet the Homeseeker SA conditions.

Once the lease period is over, tenants will have the first opportunity to purchase the property they reside in, fixed at a fixed price when they first move in.

Renters will be pre-tested to test that they meet the criteria and are expected to purchase the property at the end of the lease.

According to the SA government, the initiative will be open to all qualified buyers, but will first prioritize those who have been hiring for a long time and spending a long time in the rental market.

After the state ranked first in the Housing Industry Association’s housing scorecard, the state conducted a half-year review of residential building status in each state and region.

SA scored 88 out of 100 points, and the report shows that the number of homes started to build is now 23.1% higher than the average ten-year average.

“This initiative is a good idea and another reason why SA leads the national housing market performance and why it once again surpasses Hia Housing Recoccard, executive director of HIA SA.

“It has the potential to change the game to make long-term renters home ownership.”

Are you interested in buying or building a new one? Check out our dedication New home part.