With the April 1, 2013 expiry of the B.C. First-Time New Home Buyers’ Bonus looming, some experts expect the removal of this incentive will have little effect on the local housing market.
The bonus, worth up to $10,000, has been available to qualifying home buyers who have never previously owned a primary residence anywhere in the world and who are buying or building a new or significantly renovated home. Valley First branch manager Geoff Willers says those who qualified made up a very small number of buyers.
“Given the qualifying criteria, the first-time new home buyers’ bonus provided incentive for a limited number of people,” said Willers. “Most first-time buyers aren’t buying new. They are looking for an affordable way to enter the housing market.”
Willers said mortgage eligibility rules, which were tightened last year in the face of growing concerns about household debt and over-extension, are having a greater impact on market activity.
“What has had a bigger impact on the market over the last six to nine months is the stricter mortgage eligibility rules,” said Willers. “Shorter amortizations and increased down payment requirements have left some potential buyers on the sidelines.”
While some would-be buyers have yet to enter the market due to the tighter mortgage rules, Willers said others are biding their time and waiting for spring when there is traditionally more activity in the market.
“Although there has been a dip in market activity and housing prices recently, spring is traditionally regarded as home-buying season,” said Willers. “I don’t see this year being any different. Low interest rates continue to make buying an attractive option for some and as we approach home-buying season we expect to see an upturn in market activity.”
