Opinion will first time buyer incentive really help people into homeownership vancouver is awesome gas and water mix


To recap, the new First Time Home Buyer’s Incentive will offer first-time buyers an interest-free loan, in the form of a shared-equity mortgage, from the Canada Housing and Mortgage Corporation. The loan will be up to 10 per cent of the purchase price if you’re buying a new-build home, and up to five per cent if you’re buying resale. Only k electric bill households earning under $120,000 a year are eligible, and the program is capped at four times the applicant’s annual household income, so it will only apply to homes where the mortgage value plus the CMHC loan is $480,000 or less.

The Budget document gave an example of how it might work. It said, “For example, if a borrower purchases a new $400,000 home with a five per 9gag memes cent down payment and a 10 per cent CMHC shared equity mortgage ($40,000), the borrower’s total mortgage size would be reduced from $380,000 to $340,000, reducing the borrower’s monthly mortgage costs by as much as $228 per month.”

The CMHC loan will have to be repaid, of course. The Budget document did not say when, but the current widespread assumption is that it gets repaid upon the eventual sale of the home. The loan is interest-free, but it’s a shared-equity mortgage, which suggest CMHC would get back a proportional cut of any uplift in the home’s value, in addition to the original loan amount, although this has not been clarified.

Surprise because it’s glaringly similar to the largely unsuccessful, now-defunct B.C. HOME down payment loan program, which was introduced by the B.C. Liberals when they were in power, and scrapped in 2018 by the B.C. NDP government electricity definition chemistry. That program saw relatively little uptake, as many buyers seemed unenthusiastic about the province sharing a small slice of their home.

Positive reactions on the feds’ new measure have come largely from the real estate and development industry, which have electricity definition science lauded the attempt to not only aid first-time buyers in getting into homeownership, but also to balance any increased demand by encouraging the purchase of new homes, which should theoretically boost supply. This is a well-thought-through move on the part of the Liberals – whether it will work in practice remains to be seen.

After all, nobody is criticizing the household income eligibility level of $120K a year – such a limit has to be set, and that seems fair. And an applicant-household earning less than $120K really shouldn’t be taking out a home-purchase loan of more than gas x breastfeeding side effects $480K. It would have been more irresponsible of the Liberals to encourage those households to make pricier home purchases than that. (The only people of that income group who should buy a pricier home should be those with a substantial additional down payment, who likely don’t need this loan.)

Well, a quick search of current listings (March 21, 2019) shows there are just over 2,000 attached resale home listings in the Greater Vancouver and Fraser Valley board regions under $480K (admittedly only a handful of detached houses, but nobody starts in a detached house). Sure, that wide catchment includes inexpensive areas such as Mission, Maple Ridge and Pitt Meadows. But there are 98 such listings in Vancouver alone, and hundreds in great starter-home areas like Surrey, Langley and New Westminster. In the Greater Victoria area 76 gas station locations, there are around 300 resale homes currently available for that price or less. Unfortunately there’s no single source of data on how many new presale homes are available for under that price, but they do exist, especially in places like Langley and Abbotsford, and around the capital region.

For those who are motivated to buy, this is cheap – not free, but cheap – money that they’d be fools to turn down. The new policy is probably not significant enough to cause a rush of demand, and it may help boost new supply a little. So although it isn’t a cure-all for affordability (nothing is), we do have reason tropico 5 electricity to hope it’ll help a good number of people get out into homeownership without making affordability worse.