VANCOUVER (NEWS 1130) – The man who championed an initiative to help first-time home buyers afford a down payment has addressed some of the criticism lobbed at the program from several economists.
The BC Home Owner Mortgage and Equity Partnership announced last month matches up to five per cent of a buyer’s down payment to a maximum of $37,500 in the form of 25-year loan which is interest and payment-free for the first five years.
“This opportunity will change a number of lives,” says Rich Coleman, Minister Responsible for Housing. Coleman spoke to reporters at the program’s official launch event, next to enlarged photos of his first two homes.
Some economists argue that subsidizing down payments will only serve to funnel demand into a Metro Vancouver housing market already lacking in supply, thus forcing prices even higher.
Coleman disputes this argument, saying the program isn’t big enough to tilt the BC housing market.
— Kurtis Doering (@KDnewsguy) January 16, 2017
“Let’s say 10,000 people take advantage of this… that’s not a very big number [compared to] the number of properties that turnover in British Columbia every year. So this isn’t going to fuel the market,” he says.
According to Coleman, in the first six hours after the program’s launch, 29 applications had been submitted, and eight of them had already been accepted.
The number of new loans issued is expected to reach over 42,000 through the 2019-20 fiscal year.
While critics have said the program will ultimately require a tax hike, Coleman says “we already have the dollars from where we’re at with the property transfer tax,” and that funds generated from new taxes on luxury homes and foreign buyers helped make the program possible.
It could also open up the rental market by transitioning renters into home ownership, he said.