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B.C. First-Time Home Buyers Program: A Boon or Curse?

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Premier Christy Clark announces a new program in Surrey on December 15th. Source: Vancouver Sun

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.  

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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.

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2+ bedroom for Less than 250K in Greater Vancouver - Really?

In the past 10-Years, we have seen an unbelievable increase in the housing price and that makes this beautiful lower mainland unaffordable.  Vancouver is World’s 3rd Most-Unaffordable city  .

2-Bedroom is Standard

Minimum 2-bedroom suite becomes standard for people that lives in lower mainland. On an average, most people pay from $1200/month to $3500, based on the location and the condition of the suite.  We have discussed about  buying a home than renting one i  in the previous topic, and we would like to further emphasize that Vancouver is not unaffordable anymore.

Today, I am going to list out the homes that are 2-bedroom AND less than 250k, and yet convenient for majority of people. (NOT areas such as Maple Ridge, Pitt Meadow, Surrey, Langley).

 

There aren’t many, but here are the list  (Dec 19, 2016)

106 8040 Blundell Road, Richmond, British Columbia V6Y 1J8

$199,999.00

  • 15 minutes walk to the Skytrain station.
  •  Shops, gas stations etc are all nearby

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306 8040 Ryan Road, Richmond, British Columbia V7A 2E5

$193,000.00

  • 3 bedrooms!
  • 1133 sqft!

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103 9128 Capella Drive, Burnaby, British Columbia V3J 7K3

$239,900.00

  • 15 minutes walk to Burquitlam skytrain station

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Looking for MUCH BIGGER space within 250k?

It’s definitely possible but you may need to look into mobile home.

Here’s a mobile home that’s currently in the market, that is over 1500 sqft. Please keep in mind there’s a pad rent of couple hundred dollars per month (usually includes water, sewer, garbage and taxes). Also, you do not own the land of the property.

36 201 Cayer Street, Coquitlam, British Columbia V3K 5A9

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Own a Home under $300K in City of Vancouver

Are you tired of renting but cannot afford to buy a place because of the crazy housing market in Vancouver? At the main time, you would also like to live by city center? The truth is that there are always SLIGHTLY REASONABLE homes out there as long as you have an OK job to get a mortgage, as well as updated information about the market.

Here are the reasons why you should probably thinking about OWNING A PLACE.

  • Housing price never go down in the long run, and your salary may not catch up with the increase in housing price.
  • You rents and never own a place. What about you pay the “rents” to the bank and you can actually own a place?
  • No landlord can kick you out.
  • Worse case scenario, sell the home if you really need some cash, and you can never do that when you rent.

 

How about $300k for a home in city of Vancouver ? Does that sound a little bit more reasonable?

You get 10% down payment and the rest you can mortgage.

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The mortgage rate is approximate based on the current 2-year variable rate. Please check with your bank or mortgage specialist for a more accurate rate. Calculation is completed with the Scotia Bank mortgage calculator.

Looks like you can own home with just a little bit over 1k. I am sure there are many people that pays 1k just for a single room, or for a tiny suite and old neighborhood.  What if I tell you that there are homes under 300k?

Here are the home under $300k that are available for sale in city of Vancouver (YES, it’s Vancouver Vancouver, not Barnaby, Richmond, Surrey…).  – as per December 15, 2016

109 2239 Kingsway, Vancouver, British Columbia V5N 0E5 (Built in 2011)

$253,000.00

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202 930 E 7th Avenue,Vancouver, British Columbia V5T 1P6

$259,000.00

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1003 3380 Vanness Avenue, Vancouver, British Columbia V5R 6B8

$285,000.00

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114 1149 W 11th Avenue, Vancouver, British Columbia V6H 1K4

$285,000.00

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1003 3438 Vanness Avenue,Vancouver, British Columbia V5R 6E7

$299,000.00

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Vancouver Real Estate Market Update – December 2016

Vancouver’s High Housing Prices

This year too, Vancouver made it to the top on the list of high housing prices. In 2016, the average cost of a home in Canada climbed the peak in Metro Vancouver, at $864,556. This means that Canadian families who want to buy a home in that radius must earn nearly $140,000 per year.

According to the latest census, the median household income in Canada is $78,870. Those families who are obtaining the median income can have the wherewithal for a house priced between $460,000 and $490,000 – faintly exceeding bisection of the cost of the average housing price in Metro Vancouver.

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Overview of average housing price in each major city in across Canada. Source: CTV News

Empty-Homes Tax – A Ray of Hope to Cool Off Housing Market

After public consultation, Mayor Gregor Robertson had revealed a proposal for a one percent tax on empty homes. Now, the proposal is approved by the city council, and thus, it has become the first of its kind in the country.

All non-principal houses and unoccupied residential land that are empty for the period of full six months of the year will be liable to pay one percent empty homes tax. All homeowners in the city will have to self-declare if a property is the typical place they call home, eligible for immunity or vacant.

Robertson said, “I just want to be really clear: Almost all Vancouverites will not pay the empty homes tax. This is only going to apply to those with second or third homes that are sitting empty most of the year.

Undergoing renovations, condos and townhouses that have restrictions on rentals, and homes whose owners are in medical or supportive care will be exempted from the tax.

Such a tax on empty homes can address the spinoff effects of a red hot housing market.

Solution to the Rental Housing Crisis

Vancouver is hopeful that empty homes tax will boost the city’s scanty supply of rental stock. Presently, the rental vacancy rate is 0.6 percent – ensuing in some of the maximum rents in Canada. City data puts forward that more than 10,800 homes are unoccupied and another 10,000 are left vacant for an extended span of time.

Robertson quoted, “Vancouver is in a rental-housing crisis.” “The city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters struggling to find an affordable and secure place to live,” he exclaimed further.

The city is of the view that the rental vacancy rate would upsurge to 3.5 percent with an upturn of 2,000 rental properties.

The empty homes tax will come into effect at the beginning of 2017. It will be based on the assessed value of the property. This means – the person owning a $1-million home would pay an extra $10,000 a year in taxes.

Vancouver Homes Selling For Less than Purchase Price

Often, Vancouver real estate is acclaimed for exceptional returns. However, recently, this blooming road took a new turn when three single family detached homes bought were listed for less than the owners paid for them. At times, benchmark prices slump due to the distribution of prices, but this isn’t the situation here since these homes were purchased just 8 months before, that owners are selling at a subordinate price.

Surely, the inflated housing market of Vancouver isn’t crashing but isn’t exactly the booming market of the previous years. Does this mean that in Vancouver real estate market, affordability is setting in? Fingers crossed! With British Columbia’s new 15% property transfer surtax on foreign nationals and foreign-controlled corporations, the house sales have become sluggish, and that, in turn, will hopefully lead to moderating prices.

November 2016 Real Estate

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