It looks like Canada is about to repeat the USA housing crisis of 2008. Loans for people who can't afford it! You gotta love idiots! http://www.cbc.ca/news/canada/british-columbia/interest-free-home-loans-bc-1.3897832
The issue with BC is their is a ridiculous housing bubble. A lot of foreigners started swooping in and rose prices up. I work in the industrial trades and travel back and forth for major projects and I've worked with multiple guys who have realtors knocking on their doors with offers when their not even listed. Eastern Canada where wages are significantly lower you can get a 2000 sq foot home for 200-250k, even cheaper on the outskirts of any city. On Vancouver island or around Vancouver you can't even find condemned property for that price. They recently put in a foreign buyers tax, think its somewhere around 15% to try and get prices under control. When the normal working class can't afford to live, and a lot of the properties are already vacant to begin with, not good for the cities. We also have here in Canada CMHC which is a insurance you pay at purchase of a home if your down payment is less then 20%. It's ranges from 1.8-3.5 % depending on the amount your mortgaging vs the down payment. CMHC is basically an insurance policy for the mortage issuer. Theirs definitely some bubbles in the Toronto area as well as BC. Definitely wouldn't want to be a buyer in these areas right now.
Agreed, but this is precisely why people with lower incomes who can't afford the down payment, should be avoiding the mortgage altogether. They are also trying to prop up house prices which are beginning to fall quite drastically thanks to that 15% tax. Let the house prices fall. Wait for prices to return to something a little more sensible, then you can buy in. However, to buy into overinflated homes with money you can't even afford without borrowing the downpayment, is a disaster just begging to happen.
That is asking too much of these panicked bureaucrats. First, implement the 15% tax (obviously that had too much effect ), then when prices drop beyond what they were/are comfortable with, come up with another gimmick to keep the asset bubble rolling along... Post-2008, it's an "inflate at all costs" mentality that has taken hold.
You guys are thinking too much on an asset price basis rather than a cashflow basis. As a local at ground 0 of this I can already see savvy ways around it. Thank you to the OP for this news, this program truly is a christmas gift.
Of course! I can see ways to exploit it too, but I have money. I am more concerned about people who don't have money, and can't really afford it. These individuals will jump into unaffordable over-priced homes and find themselves in deep trouble. If you can't save the downpayment with your own resources, you have no business buying a house!
I know you mean well, but seriously go hand out food and clothes to the homeless or adopt an abused animal instead. There's too much idealism on ET vs pragmatism. If people can't do the math and blow up, it's their problem.
The USA proved that it wasn't simply the problem of the person with bad math. The shared bad math crashed the entire world economy. Certainly, Canada won't have that same effect on the world economy, but I think your attitude of reducing it the problem of the individual is rather simplistic.