More than $13 million in loans driving Vancouver condo prices upward, according to UBC economist
While the BC Home Owner Mortgage and Equity Partnership program has managed to help out multitudes of first-time home buyers by loaning out over $13 million in its first 6 months, a UBC economist has cited this provincial initiative as a leading factor in the renewed vigor of B.C.’s condo market.
The program has attracted more than a thousand hopeful buyers into a segment already overburdened by tight supply—an especially dangerous combination in the Metro Vancouver real estate market, which has seen the average condo price grow to approximately $655,000.
“It’s not the dominant driver of the market, but had you never had this program, prices would be lower than they are today,” Davidoff told CKNW. “If you took this program away, you’re looking at 10 per cent lower prices than without it.”
To date, over 1,100 individuals have benefited from the provincial program, which will loan buyers up to 5 per cent of the price of a home, with a maximum of $37,000.
Multiple observers have cautioned that the program—which has a five-year grace period on interest payments—posed a significant risk to buyers as it in essence allows them to start a second mortgage.
Davidoff noted that those benefiting from the program now comprise roughly 5 to 10 per cent of the province’s condo purchases.
“When there’s too many people chasing too few houses, pushing more people to get in on the action just seems like a really dumb idea.”
Related stories:
Association updates housing forecast
CMHC releases updated foreign buyer stats
The program has attracted more than a thousand hopeful buyers into a segment already overburdened by tight supply—an especially dangerous combination in the Metro Vancouver real estate market, which has seen the average condo price grow to approximately $655,000.
“It’s not the dominant driver of the market, but had you never had this program, prices would be lower than they are today,” Davidoff told CKNW. “If you took this program away, you’re looking at 10 per cent lower prices than without it.”
To date, over 1,100 individuals have benefited from the provincial program, which will loan buyers up to 5 per cent of the price of a home, with a maximum of $37,000.
Multiple observers have cautioned that the program—which has a five-year grace period on interest payments—posed a significant risk to buyers as it in essence allows them to start a second mortgage.
Davidoff noted that those benefiting from the program now comprise roughly 5 to 10 per cent of the province’s condo purchases.
“When there’s too many people chasing too few houses, pushing more people to get in on the action just seems like a really dumb idea.”
Related stories:
Association updates housing forecast
CMHC releases updated foreign buyer stats
