Tag Archives: FTBs

BC Budget: Taxpayer Debt To Support The Construction Industry – “Every young person out there today understands the challenges of getting into the housing market.”

“Every young person out there today understands the challenges of getting into the housing market. As parents and grandparents, we worry about the struggles our children and grandchildren have trying to save for their first home.
Even with the relief we provide to first-time buyers from the Property Transfer Tax, it is still difficult for many British Columbians to save up enough to make a down payment and still have money left over to cover all their other costs.
That is why, as part of this budget, we are introducing the B.C. First-Time New Home Buyers’ Bonus. It is a temporary, refundable income tax credit for first-time buyers who purchase newly‑built homes effective today until March 31, 2013.
They will receive a cheque for up to $10,000. Just think of the difference that’s going to make.”

[Yeah, it'll almost definitely result in the prices of New Homes purchased by FTBs rising by an effective $10K, resulting in absolutely no net-savings to the purchasers, who will continue to purchase at the very limit of their monthly-payment 'affordability' level. -ed.]
“It complements the measures we announced last week — which included raising the threshold for the existing HST rebate to $850,000, and making a similar grant available for new secondary homes outside the Greater Vancouver and Capital regional districts. Over 90 per cent of all new homes in the province are below this threshold.
Together, these measures serve the dual purpose of giving consumers a break, while supporting the new-home construction sector.”

BC Finance Minister Kevin Falcon, Budget Speech, 21 Feb 2012

This in a budget that will come in with a spending deficit of about $1 Billion.
Taxpayers are spending borrowed money to support the construction sector.
And note the glib assumption that “every young person” needs to “get into the housing market”.
Next up, assistance for toddlers interested in buying their first condo.
– vreaa

Addendum:
Find the ‘fact sheet’ regarding this bonus here:
2012 First Time Home Buyer’s Fact Sheet
[And see the end of the sheet for the hilarious example that some government wag came up with: a home for $150K! Unfortunately the home has to be in BC, Canada. - ed.]

Inventory Up A Lot, In Some Areas. And Kids Are Uninformed – “Ask any kid who bought their downtown box in the past 2-3 years how they’re doing with their fantastic ‘Equity Building’ exercise. Many wish they were still renters. Most of my friends in that position do.”

“Inventory stats on the Vancouver Market
Overall, starting the year much over last year – however – almost all of this is concentrated in 4 areas.
1.) Richmond Detached – up close to 100% over last year – Epicenter of the crash.
2.) Vancouver West Detached – up 70%. Not too far behind.
3.) Richmond Attached and Apartments – Up 25%. This is also a major problem area with close to 1,000 units for sale already at this early start to the year. This is pretty much 10 months of inventory and we have not even seen the listings flood yet.
4.) Coquitlam attached and apartments – up 20%.
Other than these four areas, inventory is at a normal opening level. There are no other detached areas which are really significantly changed..


The big chunk of the market which is Vancouver attached and apartments is pretty much starting even with last year – – showing that government policy of low interest rates and easy credit access to the banks has continued to fuel the number of first time buyers coming into the condo market. Kids are so uninformed. I feel sorry for this generation that may never see their property worth more than what it is today; it is likely to fall. Ask any kid who bought their downtown box in the past 2-3 years how they’re doing with their fantastic ‘Equity Building’ exercise. Many wish they were still renters… most of my friends in that position do.”

– posted at greaterfool.ca and forwarded to VREAA by ‘ZRH2YVR’, 9 Dec 2012

Spot The Speculator #62 – “You have to make a decision – bling or buy. We saved a 20% deposit, and now own our first place. Bling or buy baby.”

“We lived for 5 years in a 450 square feet bachelor, with a bathroom across the hall, paying $725 a month rent, and did not buy any new consumer items. We purchased only thrift store furniture and bought cheap cars (old run down VWs) and mostly consignment clothes. No bling. You have to make a decision – bling or buy. We saved a 20% deposit, and now own our first place. Bling or buy baby.”
‘Bling or Buy’ at VREAA, 27 Oct 2011 12:40pm

Speculative mania = Bonfire
‘Bling or Buy’ = Twig
– vreaa

Bartender’s Parents Buy Her A Condo – “A lot of my friends are like: “You’re just paying your parents back”.. I’m like, “No it’s not that simple, they are pretty strict”. You know, they’re just like a bank.”

Tanja Beja, Global TV Reporter: “Vancouverites already have the highest debt levels in the country. Average Vancouver Income is $45K, but it takes almost $72K to qualify for a standard condo. So how are first time buyers getting in? This mortgage broker says that about half are turning to ‘the Bank of Mom and Dad’.”

Ryan McKinley, Vancity Mortgage Broker – “It seems there has been more of an increase… as property values have risen.. parents are definitely involved in helping their kids out in any way they can.”

Beja: “That’s how bartender Jenny Fong got her place. Lacking the savings she needed Jenny’s parents bought her this condo. She now pays them monthly rent.”

Jenny Fong: “I don’t have a lot of lee-way… a lot of friends are like: “you’re just paying your parents back”.. I’m like, “No it’s not that simple, they are pretty strict”. You know, they’re just like a bank.”

VO: The difference is there is no interest, which can add hundreds of thousands of dollars.

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

Let’s hope that Jenny’s parents aren’t overextended. It would be interesting to know their ages and their total net-worth:RE ratio.  – vreaa

What You Get For $325K In Vancouver – “Maybe a very small, really old, wood-frame apartment, maybe, on the bottom floor, looking at a dumpster, maybe, I’m not sure, but, yeah, really nothing.”

Tanja Beja, Global TV reporter:  “To minimize her payments, Catherine Green is moving out of downtown and into New Westminister, where she got a two bedroom and den for $324K. In Vancouver, that wouldn’t have bought much.”

Catherine Green:  “Maybe a very small, really old, wood-frame apartment, maybe, on the bottom floor, looking at a dumpster, maybe, I’m not sure, but, yeah, really nothing.”

Beja: “Instead of a dumpster, she’s now looking at the Fraser River.”

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

Financial Planner Looking For $400K Condo – “I expected the Vancouver market to be really tough to get into, but the reality is hitting me even harder. I may need to rent while I earn more money for a bigger downpayment.”

Announcer: “Susie Shin is looking for a place to call home. The 33 year old moved to Vancouver from Toronto. She works downtown and would like to live nearby. But Shin knows in this city her money isn’t going very far.”

Susie Shin: “I’ve been working for awhile, I’m a professional, I figure at this age I should be able to afford a decent place downtown, but in Vancouver it’s a bit tough.”

Realtor: “So this is a one bedroom and den…”

Tanja Beja, Voice Over: “On Shin’s wish-list, about 700sqft, and a view. Her budget of $400K won’t get her both. But Shin isn’t spending a penny more: she’s a financial planner, and she’s calculated what she can afford, something her realtors says young buyers don’t do often enough.”

Shin: “I expected the Vancouver market to be really tough to get into, compared to Toronto… the reality is hitting me a little bit harder, you know, that I may need to rent for a little while I earn more money to get a bigger downpayment on a property.”

Tanya Beja: “So, for now, the house hunt in an overheated market continues.”

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

It doesn’t look like this prospective buyer is anticipating any price pullback.
She is putting off buying in part out of being sensible (she has set a hard ceiling on what she can afford).
Her unplanned and forced delay, to save for a “bigger downpayment”, will likely, by complete chance, work in her favour.
It’ll be very interesting to see how buyers such as Ms Shin behave when prices drop by 10% or 15% or 20%. Will they jump in, or will they start questioning the wisdom of overextending themselves to buy what will still be very expensive RE? – vreaa

Quick Snapshot Of Potential First Time Home Buyer – “We were hours away from closing on a townhouse in Port Moody when we decided to walk away from it. I’ve never been happier with that decision. Thankfully logic trumped emotion.”

“My wife and I ‘were’ to become first time home buyers after spending a year and a half living at my mother in-laws saving for a down payment (not typical these days, actually saving for a down payment?, that’s crazy talk!). We were hours away from closing on a townhouse in Port Moody when we decided to walk away from it. I’ve never been happier with that decision. Soon after, we found this site, and have just moved into a new rental unit right next to family (nearby child care). So not only do we have an acceptable rent payment but we have some money to invest, and no loans or debt of any kind.. How is that for a quick snapshot of one potential first time home buyer. Thankfully logic trumped emotion here.”
– SpatialFiend at VREAA 3 October 2011 4:58 pm