• Canada’s new extended amortization for first-time homebuyers is just another wasted government incentive.

    In 2019, our bureaucrats introduced the first-time homebuyers program. It was a new initiative where the government would give up to 10% of the down payment in exchange for partial ownership of the house. We screamed at the top of our lungs to avoid this program at all costs. Our office can probably say we did not believe a new policy was introduced that would allow any new first-time homebuyer to purchase a newly constructed home and believe it was beneficial to our clients, and we were not comfortable recommending the program. We were proven correct as this housing incentive officially closed the program in March of this year.

    This week, a new policy was introduced that would allow any new first-time homebuyer to purchase a newly constructed home and extend the payments over 30 years. It is easy to predict that the majority of Canadians will not be affected by this incentive.

    Although this program will help a small segment of the population, it misses the mark on what’s really ailing Canadians and housing.

    In the last year, most Canadians (from our sample size) are suffering from high rates and a shortage of homes in their prospective price range. In short, it is affordability.

    This proposed program has more benefits for builders than homebuyers. Most first-time homebuyers are just not in the position to afford a new build. Let’s use common sense. Most Canadians buy starter homes and gradually move out.

    It was my wish the government would reduce the stress test to 1% from 2% to help affordability. They could also have extended amortizations for all types of mortgages. What about offering builders incentives to construct where the masses could afford? Our federal regime keeps tinkering, but I am starting to believe they do not know how to properly help.

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