VANCOUVER – British Columbia’s housing minister says a program to help first-time homebuyers received applications within hours of launching.
Rich Coleman said that within six hours of the provincial loan program’s launch on Monday, 29 applications had been submitted.
He said the province would be ready to approve eight of the applications by Tuesday for the loan that is interest- and payment-free for five years.
“This opportunity will change a number of lives,” Coleman said.
The B.C. Home Owner Mortgage and Equity Partnership announced last month gives first-time buyers a maximum $37,500 loan toward a down payment.
The loan matches a first-time buyers’ down payment up to five per cent of the purchase price on homes with a maximum value of $750,000.
The loan must be paid off over the subsequent 20 years past the interest-free period, with payments scheduled at current interest rates.
After the program was announced last month, some economists criticized the move saying it would only drive up housing prices by creating more competition in the market.
“They’re wrong,” Coleman said when asked about the program’s potential to raise housing prices.
“Let’s say 10,000 people took advantage of this … This isn’t going to fuel the market. It’s not large enough to change the market.”
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The program wasn’t designed to respond to sky-high housing prices in Vancouver, Coleman said, but to help first-time buyers across the province.
“The market prices are different, but the ability to get into your first home and stabilize your family in home ownership is a good thing,” he said.
The program could also open up the rental market, by transitioning renters into home ownership, he said.
The province previously announced that it is spending around $500 million to increase rental housing.
Coleman said the combination of the loan and rental programs would ideally make both real estate and rental markets more affordable.
He said the anticipated cost of about $703 million for the first-time buyers program is not being funded by taxpayers.
“We already have the dollars from where we’re at with the property transfer tax,” he said, adding funds generated from taxes introduced last year on luxury homes and foreign buyers helped make the program possible.
Over 40,000 families are expected to benefit from the province’s first-time buyers program over the next three years.