Valley First

News For First Time Home Buyers

First-time new home buyers’ bonus removal to have little effect on market
March 26, 2013

Penticton, B.C.—With the April 1, 2013 expiry of the first-time new home buyers’ grant looming, the experts at Valley First see the removal of this incentive having little effect on the local housing market.

The bonus, worth up to $10,000, has been available to qualifying home buyers who have never previously owned a primary residence anywhere in the world and who are buying or building a new or significantly renovated home. Valley First branch manager Geoff Willers says those who qualified made up a very small number of buyers.

“Given the qualifying criteria, the first-time new home buyers’ bonus provided incentive for a limited number of people,” says Willers. “Most first-time buyers aren’t buying new. They are looking for an affordable way to enter the housing market.”

Willers believes mortgage eligibility rules, which were tightened last year in the face of growing concerns about household debt and over-extension, are having a greater impact on market activity.

“What has had a bigger impact on the market over the last six to nine months is the stricter mortgage eligibility rules,” says Willers. “Shorter amortizations and increased down payment requirements have left some potential buyers on the sidelines. At Valley First we really focus on helping our members, particularly young families trying to break-in to the housing market, structure their financial lives in a way they helps them realize their home ownership dreams.”

While some would-be buyers have yet to enter the market due to the tighter mortgage rules, Willers notes others are biding their time and waiting for spring when there is traditionally more activity in the market.

“Although there has been a dip in market activity and housing prices recently, spring is traditionally regarded as home-buying season,” says Willers. “I don’t see this year being any different. Low interest rates continue to make buying an attractive option for some and as we approach home-buying season we expect to see an upturn in market activity.”

About Valley First

Valley First is a division of First West Credit Union, B.C.'s third-largest credit union, which has 38 branches and 29 insurance offices throughout the Lower Mainland, Fraser Valley, Kitimat and Okanagan, Similkameen and Thompson valleys. First West has approximately $6.6 billion in assets under administration, 169,000 members and 1,300 employees.

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