Opinion: New home-buying incentive won't help people trying to buy in Vancouver
Written for Daily Hive by Luke Ramsay, the Development Manager for Aragon Properties. The developer has two projects launching this spring in Douglas Park and Mount Pleasant.
It comes as no surprise that modern homebuyers continue to face constraints entering the Vancouver housing market.
After years of discussion from the government, I’m happy to see the Liberal Party focus parts of the 2019 budget around issues such as housing that concern many Canadians, young and old. Many of the measures outlined in the new budget plan have been initiated to make housing more affordable for young people – those choosing to live outside Vancouver proper, that is.
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In partnership with the Canada Mortgage and Housing Corporation, first time homeowners now have access to an incentive that will fund 10% of the purchase price of a new-build and 5% of the purchase of resale homes. The First-Time Home Buyer Incentive (FTHBI) implemented by the Government of Canada will essentially act as a loan for first-time homebuyers with a household income below $120,000. This plan is estimated to save homebuyers a sum of $228 per month on a hypothetical $400,000 new-built home.
Accessibility to homeownership remains a popular topic of contention amongst prospective home buyers and, thus, a top priority for decision makers in British Columbia. These progressive efforts made by our government to reflect the needs of Canadians is a step in the right direction and I expect to see more incentives and programs targeting these affected groups.
While these policies aim to change the current purchasing landscape, there is still a lack of inclusivity that exists for homebuyers in a market like Vancouver.
Burnaby skyline. (Shutterstock)
In reality, many of the new-build homes that exist below the $500,000 mark are located outside of the Vancouver area, namely in the Tri-Cities.
While this initiative will certainly help prospective home buyers affected to enter the surrounding housing markets, the reality is that Vancouver is continuing to grow economically, offering more jobs in multiple industries, but there are no incentives to help people who work in the city, live in the city.
Without helping people living in the cities, we are driving young professionals to long commutes, or out of the cities entirely. As a young professional I want the ability to walk or bike to work, and keep my impact small, and hope that the government sets policy to help build vibrant communities within the cities we work. Increasing the cap on this incentive would help first time located in city centres.
What my team at Aragon Properties has noticed, is that factors such as sustainability, green space and social responsibility are key qualities millennials look for when choosing a new home. In short, despite the limitations set by prices in Metro Vancouver, millennials won’t compromise on their value systems; in a world of social justice and freedom of speech, the modern homebuyer looks to their home to represent themselves as a product of their purchase.
A new home under construction in Vancouver. (Shutterstock)
During the construction of one of our most recent wood-frame builds, Shift, we noticed significant interest from a particular type of modern homebuyer. This homebuyer is savvy; they are interested in levels of carbon emissions and cradle to grave environmental impact of a project, they care which building products are low toxicity and sourced locally, and about the conditions of the employees who build these projects.
Our team are impressed by the thoughtful level detail of their questions and their socially conscious mentality. Thus, it is noteworthy to consider that the way which a home has been planned, sourced and built of a home may be an equal selling factor to the price of the home.
It’s important to remember that housing affordability is a long-term issue that is being addressed by leaders at all levels and in all industries; all these new measures will certainly contribute to the uptick in market activity, however, these initiatives have the potential to act as a “double-edged sword” for those without a long-term plan of actually achieving sustainable homeownership.
Overall, I believe we are moving in a positive direction, but there is still more that the government can do to make home ownership more attainable for modern homebuyers.
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