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Billed as one of the most significant policies in Budget 2019, Prime Minister Justin Trudeau’s federal government announced a new program earlier this year, known as the First-Time Home Buyer Incentive (FTHBI).
Starting this September, the program will allow qualified first-time homebuyers to purchase their first house with a reduced monthly mortgage payment.
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And while the FTHBI was meant to give people a helping hand getting into the housing market, those looking to purchase a home in Vancouver are still out of luck, according to a new report from Zoocasa.
The incentive provides an interest-free loan of 5% toward the purchase of a resale home and either 5% or 10% toward the purchase of a brand-new build. To qualify, the property price must be equal to or less than $505,000 and assumes the buyer is putting in a minimum down payment of 5%.
“That arguably doesn’t have much traction in a market like Metro Vancouver,” Zoocasa said.
Zoocasa notes that benchmark prices for Vancouver homes for sale were $998,700 in June according to the Real Estate Board of Greater Vancouver; benchmark detached houses fetch $1,423,500 while benchmark apartments – likely the only viable entry point to the market for most first-time buyers – sit at $654,700.
And it’s not just the City of Vancouver where the FTHBI doesn’t have much play in the Lower Mainland.
According to Zoocasa, anyone looking to purchase a benchmark-priced house in one of 16 Metro Vancouver markets using the FTHBI, “is out of luck altogether.”
This is because there are simply “no options priced low enough to qualify for the program anywhere in the region.”
Condo market cooler
That being said, those looking to purchase condominium using the FTHBI, seven Metro Vancouver markets fall into this category, “though they remain beyond the downtown core.”
Across the region, some benchmark condo prices could potentially qualify for the FTHBI, assuming a home buyer qualifies based on a household income of $120,000 and has saved the requisite 5% down payment.
Markets with qualifying benchmark apartment prices include:
- Maple Ridge: $355,200
- North Delta: $377,900
- Surrey (excluding South Surrey): $416,400
- Langley: $416,900
- Port Coquitlam: $446,500
- Pitt Meadows: $498,400
- White Rock / South Surrey: $500,100
Zoocasa said these home prices were sourced from the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board for the month of June 2019.