TORONTO,– Real Estate Analyst and Vice President of PPS Realty Brokerage, Ali Salarian, hopes that the new federal first-time home buyer incentive program will not be inclusive for all Canadians.
Administered by the Canada Mortgage and Housing Corporation (CMHC), the First-Time Home Buyer Incentive Program, which was announced during the March 2019 federal budget, would help eligible Canadians with a household income under $120,000 per year to be able to afford to buy their first home. Through the new program, the CMHC would provide 5-10 % of the value of a home for a first-time home buyer through a shared investment. The new program requires at least 5% of down payment contribution by the buyers.
Many first-time home buyers started connecting with their mortgage brokers and lenders, asking about the effective date of the mentioned program in order to start hunting for their first dream home in the market. The disappointment hit many of the metropolitan areas in Canada like Greater Toronto Area, Vancouver, Calgary, Edmonton, Ottawa & Montreal when it became known later that the program is capped to a maximum of 4 times of the household gross income. A $480,000 is barely an entry level in the said markets for single and couples with very small family size. However, in other markets like suburban of Ottawa, London Ontario, Manitoba, Saskatchewan and rest of Canada, this is great news.
The program could be one of the smartest that the federal government might have introduced, especially if the maximum limit was adjustable as per the average housing price of different real estate markets across the country. However, this is still a great idea if the government is doing this to encourage the movement of people around Canada as well as boost the economy through the building of new houses and condos, and, in fact, an extraordinary idea if the program gives a preference of 10% toward the newly built purchase. CMHC might also be another big winner since incorporated by investing its insurance premium fund directly into lucrative real estate market, and it may enjoy the capital gain in partnership with first-time home buyers as suggested in the program.