Heres a couple or articles for you with a snapshot of the First Time Home BuyersProgram – Canadians seem to be
missing the boat on utilizing some of their nest egg as a source of downpayment. Also an article to piggy back that about the market and it being a good opportunity to buy with lower housing prices and low interest rates. What are we waiting for? A better deal?
Canwest News Service;
Too many first-time buyers miss out on maximizing the use of the federal government’s First Time Home Buyers Program, which allows people to use RRSP savings for a down payment up to the new limit of $25,000, says Laura Parsons, area manager in specialized sales with Bank of Montreal (BMO). After a two-year grace period, you must repay one fifteenth of the amount used each year. On $20,000, that means you pay back $1,300 into your RRSP every year. If you can’t, it becomes taxable income. Also, consider closing costs, insurance, property taxes, condo fees, heating costs along with other unexpected costs such as buying a lawn mower or air conditioner when determining how much you can reasonably afford.
Kristine Owram, The Canadian Press
“The uptick in first-time home buyer purchases across the country is quite astonishing,” said Soper, speaking Tuesday at a BMO conference on Canada’s housing market.
“Affordability in places like Vancouver has improved for the first time in a very long time.”
BMO senior economist Sal Guatieri said the average mortgage payment has fallen by one-third or $600 a month from its peak, while average resale home prices have fallen 14 per cent from their highs.
Guatieri said he expects resale prices to fall “moderately further” this year for a cumulative decline in prices of approximately 20 per cent.
But Peter Norman, a consultant with independent real-estate adviser Altus Group, said the dramatic drops in home prices seen in places like Vancouver, Edmonton and Calgary are the exception rather than the norm.
“This is not a housing adjustment period in Canada,” Norman said in an interview.
“Certainly housing demand has slowed down because the economy is the pits, but housing supply has slowed down a lot as well as a result…. Outside of a couple of sub-markets there hasn’t been much of a downward adjustment on price.”
Still, other changes in the market are making this a good time to buy a first home – as long as the buyer can afford it, Norman said.
“There are a lot fewer of those stories of really rapidly selling houses, bidding wars, all that kind of stuff, so I think it can be a bit more of a sane market for somebody who’s trying to buy right now,” Norman said.
“It may take away some of the anxiety or it may help you make a better decision.”
And most importantly, overall affordability in the housing market has improved.
“If it wasn’t for the recession and the aversion to financial risk that people have right now, it would probably be a very active market and a very good market,” Norman said.
The Canadian Real Estate Association reported that house prices and sales continued to slide across Canada in February – the latest month for which data is available – compared to the same time last year, but activity was up for the first time since September.
The association said resale home prices fell 9.2 per cent across Canada in February to an average of $281,972 while sales fell 31 per cent to 25,373 units, the smallest year-over-year decline since October 2008. Seasonally adjusted sales fell 26.8 per cent.
Meanwhile, the number of homes that traded hands on the multiple listing service, or MLS, was up 8.6 per cent above seasonally adjusted levels in January.