21 Dec B.C. First-Time Home Buyers Program: A Boon or Curse?
Good news for those who have always wanted to buy a house, but could only fulfil their desire in a dream. Excited to know the entire talk, who wouldn’t be? After all, it’s about your new home that you are going to own and not the one that will be rented! The program will take head from Jan, 16 as the B.C. government offer down payment loans to the first time home buyers.
Showers of opinions in the form of another real estate debate are attracting tremendous views on air as soon as the news hit the Vancouver housing market. Read the entire discussion worded here:
Highlights of the Program
The first time home buyers plan called the B.C. Home Owner Mortgage and Equity Partnership program has listed different eligibility criteria to provide its benefits to particular people in need. Given below is the checklist that your documents and potentials should match:
- The 25-year loan is free from interest until first five years and will cover up to a maximum of $37,500. This means you have to pay interest on the current rate after five years.
- Your down payment amount should be equal to the loan amount.
- You should be a Canadian citizen or permanent resident for five years and have never previously owned property.
- You should have lived in B.C. for at least one year.
- You should be free from any legalities of owning an interest in the residential property at any point in time and in anywhere in the world.
- The value of the house you want to purchase should be less than $750,000.
- Your document credentials should help you in qualifying an insured high-ratio first mortgage for at least 80 percent of the acquisition of prices.
- Combined gross household income of you and your home partner should not be more than $150,000.
An approximate figure of 42,000 B.C. residents has been expected to get benefits from the three-year program. Furthermore, the housing program will lessen the effects of the new mortgage rules and help first time home buyers to sustain competitively in the housing market.
All about the Demand and Supply
The market is growing higher and so do the pricing because of the unmatched fulfilment of demand and supply. As a result, sales of expensive single-family homes are falling.
However, as per the senior economist Bryan Yu with Central 1 Credit Union, trade of homes in the more affordable condominiums and town home segments of the market remains full of life. He also stated that the recent findings on program impact had thrown a considerable light on the improved local citizens’ home purchasing abilities than before in the condo and town home market. Nevertheless, the program is playing a significant role in heating further the B.C.’s real estate market which is already strong.
Concerns or Politics
Premier Christy Clark positively reviewed the program by stating that it will wipe out the stress of saving high down payments of the middle-class British Columbians. The primary concern she raised revolves around the pocket weight and saving obstacles of an average home buyer.
Clark further said that for many first time home buyers, getting past that down payment and saving $25,000 or $50,000 to buy a new home is just impossible.
Tom Davidoff of the University of B.C.’s Sauder School of Business holds an entirely different opinion around the scheme. He settled the program as an amalgamation of bad economics and a step in the wrong direction. He believed the program to be an attempt by the government to support the real estate market that holds a risk of severe disappointment by coming 2017.
New Democrat David Eby, the Opposition’s real estate critic, resolved a negative approach towards the initiative. He said that the plan increases the debt burden of the home buyers when the government should be constructing affordable accommodation on provincial land.
How people are taking it?
The current scenario hits positive responsiveness among developers, mortgage brokers, the real estate business and some housing forecasters in B.C. Especially, those with insufficient income and savings are looking forwards to getting enrolled in the first time home buyers program as soon as it takes ground. Furthermore, industry experts argued that the plan will help to speed up the entry into the real estate market of those who qualifies for the mortgage.
The primary concern that is bothering all is whether the program will reveal out as a political stunt, caused only to attain public preference and favorability or will it be the “real thing”, and will the Vancouverites housing dreams come true just the way it’s been pictured by the program founders and the ruling politicians.
Until now, it seems that the first time home buyer scheme will be a boon and not a curse for the residents of B.C., yet only the future can decide the real outcome.