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BC government offers help to first-time buyers

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Justin da Rosa | 15 Dec 2016, 02:00 PM Agree 0
A new government program promises to match the down payment for eligible first-time homebuyers
  • J.S. | 15 Dec 2016, 02:20 PM Agree 1
    It's great that the BC Government is helping first-time homebuyers but I am wondering what this program is doing to address the increasing house prices. If this program enables even more people to get into the market, will that not just increase demand? Won't an increase in demand with no corresponding increase in supply just drive home prices up even further? When are programs going to be put into place to address the supply issue?
  • JD | 15 Dec 2016, 02:29 PM Agree 1
    The supply issue is a city one - when will the city walk the talk - they keep talking about affordability- but don't increase density or supply - - and the red tape at city hall costs the end purchaser- I don't think the city is living in the same zone as where the housing crisis is occurring- it certainly appears they are really disconnected!!
  • Tony Bal | 15 Dec 2016, 03:02 PM Agree 0
    Very good decision

    First time home buyer's dream will come true
  • | 15 Dec 2016, 04:13 PM Agree 0
    BC resident for 1 year, it should be longer than one year this is the BC Government
  • Mark Ranger - RE/MAX Kelowna | 16 Dec 2016, 09:32 AM Agree 1
    Supply and Demand are out of balance with respect to wages for the average First Time Buyer. This program will only increase the Demand which will in turn dial up prices. Vicious cycle in which no government should dare foray. The best policer of the housing market is... the housing market... let it do what it does best... find equilibrium... real equilibrium. We keep kicking the can of unsustainable price increases down the road. It will catch up with us eventually... always does.
  • Steven Crawford | 16 Dec 2016, 12:38 PM Agree 1
    Look. No-one disputes how very unfortunate and difficult it is for first time buyers in the major BC markets. That sentiment aside, I am a successful mortgage broker and I think this is a HORRIBLE idea.

    I am not even sure how easy it will be to execute this program. Most banks already have a "no secondary financing" clause in their approvals. What payment would need to be factored into debt ratios? Despite no payment for 5 years per the program, a mortgage lasts 25 years in this example. Declaring no payment won't fly, shouldn't fly because it's coming. If the buyer has to declare 3% of loan limit as per most other debts like it, that's an additional $562 payment needing to be declared on a loan for half of 5% down on the $750k max purchase price example. Using their max income example it leaves very little room for the buyer to have other debts. In fact it leaves no room. All that a buyer going to max limits could afford would be the house and the second mortgage BC loan. No room for car payments, student loans, credit card debt etc...

    On a larger concern scale, wouldn't this dabbling in local economics offer major further incentive to the Government to manipulate supply and demand to not have a bubble actually hit their market. They already have billions of reasons today to do all they can to avoid their bubble. They have a tax revenue to protect. They are ultimately the largest player in charge of supply and demand in their market. Government has benefited greatly by turning a blind eye to the obvious.

    But despite their "efforts", imagine when the bubble does hit. If this program took off, they may have billions in bad loans to deal with. First time buyers entering at a peak would have short sale situations to deal with. They would be unable to sell and unable to rent the property without paying the loan off.

    I suspect banks will not allow most applications anyway. The Government probably already knows this but will then blame the banks while looking like they wanted to do something about the problem they helped to become such a major issue.

    It's a hypocritical and dangerous program.

    .02 cents



    Steve Crawford, Mortgage broker.
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