Even with the foreign buyer tax in place, housing prices in Metro Vancouver on average remain quite high and are getting higher. Simply put, housing units in metro Vancouver are in great demand but short supply.
But the same tax that aims to make properties more expensive to foreign investors is now helping make homes more accessible to first-time buyers. According to CTV News in Surrey, qualifying buyers will be able to secure 25 year loans matching the owner’s down payment funds up to $37,500. These loans will be payment-free and interest-free for the first five years.
This program comes as ecstatic news for those entering the Fleetwood real estate market for the first time and looking for a way to stretch their current savings further.
How B.C.’s First-Time Homebuyer Loans Work
The interesting thing about B.C.’s loan program is that it applies to very specific situations. While some may see these limitations as a burden, it actually works out to benefit a certain demographic of qualified buyers with little to no drawback.
Here is how the program works:
- Applicants must have a combined gross household income of less than or equal to $150,000.
- They have been Canadian citizens or permanent residents for at least the last five years, and they must have lived in B.C. for at least a year.
- They must then qualify for a mortgage on a property in the province valued at $750,000 or less.
- When the applicant goes to make a down payment, the special loan will match their funds up to $37,500.
As an example, Sam and Liam qualify for a mortgage on a home costing $560,000 in Fleetwood which requires a 10% minimum down payment, or $56,000. If the two have enough savings to qualify for the loan, they can contribute the full $56,000 and have the B.C. special loan match $37,500. This creates a larger down payment of $94,500 while lowering their principal and their monthly payment as well as what they pay in total interest.
Or, the two could choose to pay only $37,500, have the loan match the maximum amount, creating a $75,000 down payment and leaving more in their savings for emergencies.
A Growing Market for Fleetwood Real Estate
With more buyers able to qualify for safer, lower-interest loans, the market for affordable homes for sale in Fleetwood could soon grow and become more competitive. As mentioned in the linked article, at least one expert’s analysis states that buying activity may not increase, but the fact remains that buyers will be able to make more confident, competitive offers with extra money in their pocket for a down payment.
In the end, the net effect is good for both buyers and sellers of Fleetwood detached homes. If you are aseller, you can work with me to specifically target first-time buyers who are more likely to supply ample down payments with the new loan program in place. If you are a first-time home buyer, I can help you locate the perfect starter property for you within your budget to help you get the maximum benefit of the new loan program.
Since both parties can benefit, this truly is an exciting time for the Fleetwood property
market and myself as an agent.