British Columbia kicks off relief plan for home buyers
By Nicole Mordant
VANCOUVER (Reuters) - First-time home buyers in British Columbia, home to Canada's most expensive real estate market, started applying in small numbers for loans from the provincial government on Monday under a program it says will make ownership more affordable.
The Western Canadian province last month unveiled a plan to provide 25-year loans of up to C$37,500 ($28,480) to qualifying buyers to help with their first down payment. The loans are interest-free and require no repayment in the first five years.
British Columbia has said it would make available about C$703 million over the next three years to help an estimated 42,000 British Columbians buy their first home.
Twenty-nine applications were submitted and eight already been approved, Rich Coleman, British Columbia's minister responsible for housing, said.
The program has been criticized by economists and academics who say it will pile debt onto already financially stretched residents and raise home prices in a region where a supply shortage is the real problem.
Some have said the plan, launched four months before a provincial election, is politically motivated.
"If this program does anything, the only thing it can do is increase demand. It can't increase supply. That puts upward pressure on prices and ultimately harms affordability," said Joshua Gottlieb, an assistant professor of economics at the University of British Columbia.
Coleman said the number of people expected to apply for loans was small compared to the number of homes bought and sold in British Columbia annually. "This is not going to fuel the market," he told reporters. Continued...