Shared equity mortgage not much help for homebuyers in pricey Vancouver, says REALTOR®

Dated: March 22 2019

Views: 107

Shared equity mortgage not much help for homebuyers in pricey Vancouver, says realtor

Realtor says grant could benefit those looking to buy in suburbs

The so-called shared equity mortgage plan was announced in this week's federal budget. (Darryl Dyck/Canadian Press)
6 comments

The federal government's attempt to help first-time home buyers enter the real estate market won't help many would-be homebuyers in the pricey Vancouver market, a realtor says.

"I think it's more window dressing than anything," said Steve Saretsky, realtor and author of real estate blog, Vancity Condo Guide.

The so-called shared equity mortgage plan was announced in this week's federal budget.

It would apply to first-time buyers whose household income is less than $120,000 per year. It works like an interest-free loan where a would-be buyer is able to pay a five-per-cent down payment, and the Canada Mortgage and Housing Corporation (CMHC) would kick in up to 10 per cent of the value of a newly-built home or five per cent of the value of a resale.

In addition to those stipulations, the program caps out at four times the applicant's annual income, which means it can only help homeowners looking to buy properties where the mortgage value plus the CMHC loan don't exceed $480,000.

"There's not a whole lot under $500,000 at least in the city of Vancouver," Saretsky said.

"But this might do more to maybe stimulate the outlying areas maybe in the suburbs where where you can get a condo."

A search of the Real Estate Board of Greater Vancouver's listings website, realtylink.org on Wednesday showed 135 listings — including houses, condos and townhomes — in Vancouver for less than $500,000, 115 in Burnaby, 24 in Port Moody. In Abbotsford there were 346 properties listed for less than $500,000.

Details scarce

Zaheed Valli-Hasham, a mortgage broker with Dominion Lending, said he went through his data from 2018 and doesn't think the shared equity plan would have helped a lot of his clients.

"Approximately six per cent of my clients from 2018 could have benefited from this program," Valli-Hasham said.

"So, in my particular business, just to put things into perspective, it wouldn't have been a big big chunk of my clients."

He and Saretsky say they haven't fielded many calls from would-be buyers inquiring about the plan, which is just as well because details on the implementation are scarce.

The federal government has said more details are coming, but it's expected applications will be accepted starting in September.

Blog author image

Steven Axford

Steve is a award winning Realtor in Victoria BC, with his listings selling faster and for top dollar! Growing up in Victoria, BC and has always been active in his community. Steve is a Victoria Couga....

Latest Blog Posts

A greater commitment to development required to balance local housing market

October 1, 2021  A total of 761 properties sold in the Victoria Real Estate Board region this September, 23.1 per cent fewer than the 989 properties sold in September 2020 and 8.4 per cent

Read More

CMHC says annual pace of housing starts in Canada slowed in July

OTTAWA — Canada Mortgage and Housing Corp. says the annual pace of housing starts in July fell compared with June.The national housing agency says the annual pace of starts fell to 272

Read More

Victoria housing inventory continues to decline over summer months

August 3, 2021  A total of 835 properties sold in the Victoria Real Estate Board region this July, 14.7 per cent fewer than the 979 properties sold in July 2020 and 11.4 per cent fewer than the

Read More

Victoria's $100 million Customs House luxury condominium project nears completion

Three years after touring Victoria’s Customs House mixed-use condominium and retail offering during its interior de-construction, Citified is honoured to be the first media

Read More