B.C.’s home loan pro­gram draws more first-time home­buy­ers into mar­ket

StarMetro Vancouver - - FRONT PAGE - jen st. de­nis/metro

Real­tors say clients are tak­ing ad­van­tage of the B.C. gov­ern­ment’s new in­ter­est-free down pay­ment loan pro­gram, and it may be help­ing to boost condo sales — es­pe­cially in more af­ford­able mar­kets such as East Van­cou­ver and the Fraser Val­ley.

Mean­while, higher-priced parts of Metro Van­cou­ver’s hous­ing mar­ket, and es­pe­cially the sin­gle de­tached mar­ket, con­tinue to lag.

“It’s raised the hopes of some peo­ple who didn’t have the down pay­ment,” said Brian Rush­ton, a real­tor with Cen­tury 21, of B.C.’s HOME loan pro­gram. “There’s been an in­crease in ac­tiv­ity as it re­lates to first-time buy­ers.”

The tax­payer funded, in­ter­est-free loan pro­gram lends ap­pli­cants up to $37,500 to­wards a down pay­ment. Suc­cess­ful ap­pli­cants don’t have to be­gin pay­ing the loan back for five years, but must be preap­proved for an in­sured high­ra­tio first mort­gage, where the down pay­ment is less than 20 per cent of the home’s pur­chase price.

Steve Saret­sky, a real­tor with Sut­ton Group-West Broad­way, noted that de­tached sales in the Fraser Val­ley are mori­bund, town­houses are go­ing strong, but the condo mar­ket is “off the charts,” with condo sales up 42 per cent year over year.

“I think right now what’s driv­ing the mar­ket is the quest for af­ford­abil­ity,” Saret­sky said.

“What I see in the mar­ket right now is a lot of first-time buy­ers. It’s kind of scary.”

Saret­sky con­firmed he has some clients who are or plan to take ad­van­tage of the B.C. HOME Part­ner­ship pro­gram, and has heard from other real­tors that in­ter­est in the pro­gram is strong. Both Saret­sky and Rush­ton em­pha­sized that their in­for­ma­tion is anec­do­tal only at this point.

Sev­eral B.C. econ­o­mists have warned the pro­gram will have the ef­fect of fur­ther in­flat­ing prop­erty values in Metro Van­cou­ver, and could put some buy­ers at risk.

But it’s too early to tell how much im­pact the pro­gram is hav­ing on B.C.’s hous­ing mar­ket, said Bryan Yu, an econ­o­mist with Cen­tral 1 Credit Union. The cur­rent 340 ap­pli­ca­tions rep­re­sent just five to six per cent of over­all trans­ac­tions across the prov­ince in the same time pe­riod.

Yu ex­pects de­tached houses to con­tinue to fall in price.

“The for­eign buyer tax did do a num­ber on that mar­ket and we’ll con­tinue to see some price de­clines,” he said. But he ex­pects condo prices to rise.

De­spite ac­counts of mul­ti­ple of­fers be­ing made on some condo units, Saret­sky is scep­ti­cal that the condo mar­ket is heat­ing up. Prices have re­gained the ground they lost be­tween June and De­cem­ber, when the en­tire mar­ket was cool­ing.

But mul­ti­ple bids are hap­pen­ing be­cause the num­ber of con­dos listed is low.

“There are five or six of­fers be­cause there’s no in­ven­tory,” he said. “Sales are still down 25 per cent — I don’t think there’s as much steam as ev­ery­body thinks.”

Jen­nifer Gau­thier/Metro file

Con­dos line the wa­ter in Van­cou­ver’s Yale­town neigh­bor­hood. Condo sales are up 42 per cent year over year.

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