Praising a forecast market correction in Vancouver as a return to sanity:
The new first time buyer teaser loan program announced by the BC government has met a suprisingly negative reaction in the media, but some online polls show voters approve.
This move seems designed to undo some of the federal ramp back of housing market fuel. Bearvancouverite points out this might help developers who are seeing people backing out of presales agreements.
This might be exactly why Christy did it. Developers were panicking that presales won’t close because mortgage qualifications would be so different in the next few years, they need to dangle a carrot to make sure speculators don’t just walk away and first time buyers can be convinced to take over presales from flippers.
Scoop points out why this program should be referred to as a “teaser loan” as made popular in the US housing bubble:
It’s the end of another work week and that means it’s time for another Friday free-for-all!
This our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–Homes so pricey gov will chip in to help
–FAQs about fat family debt
–prices slide in YVR up in Toronto
–Looks like Vancouvers bubble has burst
–What benefits to new loans program?
–Bush downpayment act of 2003
–How a US rate hike will affect Canadians
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Most people agree that there’s a problem with the BC real estate market, and that problem is usually called ‘affordability’.
Affordability usually means what you’re buying is too expensive, but it can also mean that you just can’t afford the monthly payment.
Interest rates look at risk of rising, but have been at rock bottom levels for years. That means there’s not much room to move on ‘affordability’ when it comes to interest rates.
So we’re stuck with two options: price comes down or government starts giving away money.
Daily Hive says they know what this announcement will be.
Update: They were correct, here are some details:
The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.
“The dream of home ownership must remain in the grasp of the middle class here in British Columbia,” said Premier Christy Clark.
The intention of the program is to assist people who can afford the mortgage payments on a new home but are challenged to make the down payment.
The province will start accepting applications for the program on Jan. 16, 2017.
Homebuyers will pay no monthly interest or principal payments over the first five years as long as the home remains their principal residence.
After the first five years, homebuyers begin making monthly payments at current interest rates.
If too much debt got us into this problem, surely it can get us out of it right?
Meanwhile the Bank of Canada is warning again about huge mortgages and growing household debt.
There’s an absolute injustice happening in our fair city. Honest home owners who by no fault of their own now find themselves in the position of owning a home that is assessed at more than a million dollars. People who have struggled and strived to achieve home ownership only to have the $570 property tax grant torn from their weary hands!
A greedy government is intent on charging these poor home owners property taxes without giving any of it back! The province cruelly raised the cutoff from 1.1 to 1.2 million earlier this year, but what is that? Less than 10 percent! Some assessments are up more than 40 percent! What are these poor homeowners supposed to do- sell and cash in on a hugely inflated market?
Fortunately there are freedom fighters who are advocating for the downtrodden and calling for a rise in the cutoff for the homeowner grants. Pray that they succeed, because you know if the government succeeds in it’s evil plan to retain this $570 home owner grant they’ll only waste the money on caviar, cigars and saving people from fentanyl overdoses.