The federal government’s First-Time Home Buyer Incentive will launch on Sept. 2, and although it’s expected to help many Canadians, one analyst doesn’t expect it to have a major impact on the Winnipeg market.
The new program, which was first announced in the federal budget last March, would see the government help some first-time buyers by advancing an interest-free loan of up to five per cent of the purchase price of an existing home, and up to 10 per cent of the cost of a new home if certain conditions are met.
In order to qualify for the program, buyers must have a household income below $120,000 a year.
Peter Squire, Vice President of External Relations and Market Intelligence with Winnipeg Realtors, said the program is tailor-made for the Winnipeg market.
“We certainly have a lot of affordability compared to much more expensive markets like Toronto and Vancouver, so it certainly would apply to first-time buyers in our market,” Squire said.
However, Squire doesn’t anticipate the incentive to raise home prices in Winnipeg.
“Our market is very well-supplied right now,” he said “We have a healthy, balanced market.”
According to the government, the incentive means that a home purchased for $485,000 would save $3,327 a year on mortgage payments, or about $277 a month.
Realtor Boris Medvikov is selling a home in Winnipeg’s Bridgewater neighbourhood for just under $470,000 which he believes is perfect for a young family, but might currently be too expensive for first-time home buyers.
“In today’s market, a lot of first-time home buyers will look at houses around the $300,000 to $400,000 range,” Mednikov said.
Come September, Mednikov expects to sell more homes above that range when the incentive kicks in.
“It definitely will be a great help and we hope it’s going to make some peoples dreams come true.”