Would-be homeowners take advantage of partnership program, says province

Since applications opened on Jan. 16, 2017, the province saysmore than $1 million in loans have been grantedto first-time home buyers through its B.C.Home Partnership Program.

The program provides loans of up to $37,500 up to five per cent of the purchase price to help first-time home buyers funddown payments in the province'shousing market withclosing dates on purchases after Feb. 15,2017.

"First-time home buyers are taking advantage," according to a written statementreleased Saturday about the program.

It saidmore than $1.1 million in loans has been conditionally approved for more than250 applicantssince applications opened.

"One problem about the program is that with the increased down payment, interest-free loan, you could actually be putting some inflationary pressures in the market as well," said Bryan Yu, senior economist with Central 1 Credit Union.

He says first-time homebuyers make up about 20 per cent of the province's market.

Home Partnership Program by the numbers:

• Actual applicant purchases: 67
• Applications received: 340
• Page views of programwebsite: 60,000+

The program runs until March 31, 2020 and the provinceanticipates spending more than $700 million over the next three years to help an estimated 42,000 B.C. BritishColumbians"enter the market for the first time."

Academics have criticized the program saying it is a political move that only benefits people who most likely can already afford to get into the market.

Economists like UBC's Tom Davidoff saidthe early data released by the government does not break down if buyers inthe program are using the loans to provide half of a five per cent down payment, or simply taking advantage of free government money.

The 25-year loan is interest free and payment free for the first five years.

Davidoff also worries if there is a price correction for housing in the province, that some people using the program may default on the government loan.

"We're at the top of the market today and the market may correct significantly, it's possible these loans will go bad," he said.

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