ENM Responds to First-Time Home Buyer Incentive

(Newswire.net — April 4, 2019) Langley, BC —

Last month, the federal government announced the creation of a First-Time Home Buyer Incentive as part of its 2019 budget. The measure is intended to make it easier for Canadians to buy their first home by allowing them to share part of the cost with the Canada Mortgage and Housing Corporation (CMHC).

The new incentive applies to Canadians with a household income of less than $120,000/year. The CMHC will provide 5% of the value of a home for a first-time homebuyer through a shared investment. The incentive will increase to 10% for a newly-built home.

Analysts forecast that over 100,000 home buyers will benefit from the incentive over the next three years. Buyers will be allowed to wait until they sell their home to repay the loan to the CMHC.

The incentive will be capped at four times the income of the prospective buyer to prevent out-of-control mortgage debt. With the maximum home price at $480,000, the incentive will have little benefit for buyers in high-value markets like Toronto and Vancouver. But in smaller cities and rural areas, the program will help thousands of millennials and middle class families become homeowners.

The new program is similar to the one introduced by B.C. Liberals in 2017. Like this one, it was announced in an election year in an attempt to win millennial votes. The B.C. program failed both as an idea and as an election strategy, primarily because it was difficult to understand and people weren’t thrilled with the idea of sharing ownership of their home with the government. It was cancelled when the NDP came to power.

ENM’s co-founder, Daniel Greenhalgh, supports the federal program and believes it will succeed in areas where our provincial program failed. “The B.C. program required buyers to begin loan repayments to the government in five years, which would have exacerbated our family debt crisis. The federal program will drive demand for new homes, spur the supply and help alleviate the nationwide housing shortage,” says Greenhalgh.

Should the Liberals lose the October election, the program will likely be cancelled or altered. We encourage all parties to consider maintaining a first-time home buyer’s incentive as part of their election platform. These kinds of incentives benefit young families as well as the housing industry by smoothing the path to owning a new home.

 

(Newswire.net — April 4, 2019) Langley, BC —