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First time home buyers in Halifax
First time?. Don’t feel like listening? Check out the audio transcript below.
This is a five-minute business builder with Rick Howe, where your business comes first, on News 95.7.
Talking about the Halifax Market
Rick: [00:00:07] From time to time, of course, we’re bringing in members of the local business community to join us for a discussion and this afternoon. Well, welcome back. Senior mortgage adviser Clinton, Wilkins, Hi Clinton.
Clinton: [00:00:16] How are you doing today?
Rick: [00:00:17] I’m doing great. How are you, sir?
Clinton: [00:00:18] I’m doing just great. Thanks for having me. Right.
Rick: [00:00:20] Well, thank you for joining us here again today. We’re going to talk about, again, some pretty good deals being offered now for first-time homebuyers. And the politicians are out there this election campaign, and they are pretty much offering the sun right now. So tell us what’s going on and what can the first time homeowners look for?
Deals for first time home buyers
Clinton: [00:00:36] Well, I think homeownership is part of the Canadian dream, and I think the political parties definitely have attached that. It’s a really hot subject right now. And there were some new promos and some new incentives that have really started the first of September that are impacting first-time homebuyers.
Rick: [00:00:52] And these are already in effect.
Clinton: [00:00:53] Yeah, they’ve started already. So from the federal budget immediately they enabled borrowers to take up to thirty-five thousand out of their RRSP. So that started straight away. But now as of September 1st, the home buying incentives now have started as well. So for a resale property, for a first time homebuyer, the federal government will increase the down payment by 5 percent and they’ll basically own 5 percent of the home. And on a new construction property, they’ll own 10 percent of the home. So what really.
Rick: [00:01:21] you have to pay that back is to pay it back by the time you sell the home.
How does the incentive work?
Clinton: [00:01:25] Exactly. But how do you sell it or if it becomes a rental or in 25 years? So the way that it works is if the home appreciates, you’ll spend you’ll reimburse the government. If it’s new construction, 10 percent of that value as a resale 5 percent. So the government’s really in it to either make the money if the home appreciates or they’re willing to take the risk if the property deal decreases in value to give you a bit of a break. Now, it’s an interest-free loan and it’s basically that they’re going to own a percentage of the property. So it’s an interesting program. And essentially what it’s going to do, it’s going to reduce your mortgage payment.
Rick: [00:02:00] So how? Over what term? How long is the term?
Clinton: [00:02:03] So it’s up to 25 years. So you don’t make any payments throughout the 25 years unless you sell the home or unless you it becomes a rental. So if you move out of it, then you’d have to pay it off in full.
Rick: [00:02:13] And that’s interest-free you say?.
Does interest-free make sense?
Clinton: [00:02:14] It’s interest free. But it’s all gonna depend on what happens with the value. So if the value goes up, you could pay more than the amount that they’re loaning you. But what’s the future value of money? You know, for me, I’d like to have a 5 percent or 10 percent lower mortgage payment. I’m willing to take the risk for the government to potentially make some money off of me because we don’t know what’s going to happen with the interest rates. We don’t know what’s going to happen with the property values.
But I think anything that the government’s willingness to offer for first-time homebuyers and, you know, talking about homeownership is good for Canadians. And I think it’s really good for people here in Halifax, and Atlantic, Canada. I think the programs really designed for us, because there’s a certain cap on the property value, it’s five hundred thousand, which, you know, that really encompasses a lot of properties that are going to be first-time homebuyers, at least here in Halifax.
Rick: [00:02:59] Well, and the interest rates are pretty stable right now, are they not?
How are the interest rates?
Clinton: [00:03:03] The interest rates are almost at all-time lows right now. So I think it’s a great time to talk about homeownership. You know, we’ve really heard that Halifax is a bit of a boomtown and it’s more of a seller’s market. And, you know, I think some buyers are concerned with that because the prices have been going up steadily in Halifax and there’s not a lot of supply in the market. But some of the economists think that it’s not going to get better, it’s not going to switch to suddenly be a buyer’s market.
Rick: [00:03:26] Yeah
Clinton: [00:03:26] So it’s we’re in a situation where it’s by now or potentially by never.
Rick: [00:03:31] The Halifax market right now, understand, is pretty hot, hot, hot.
The Halifax market is hot.
Clinton: [00:03:33] It’s super hot, which is exciting, I think, for everyone. Certainly, if you’re a homeowner and you’re looking to sell, you’re probably going to make a little bit more money today than you were a couple ofv years ago. And if you’re a homebuyer, I think it’s the time to potentially get off the fence because, you know, the property values are just going to go up even more. And there could be less and less inventory available as really the population grows in Halifax.
Rick: [00:03:56] Does it matter who wins the election then? Let’s say the liberals lose and the conservatives win. These programs still in play?
Clinton: [00:04:01] The programs are still in play. And you never know. There could be changes because the government of the day, obviously, can make rapid and fast changes to the rules. I can tell you the other day on some of the platforms, the liberals said that they would increase the homebuyer incentive to increase the property values. So maybe up to eight hundred thousand, that could impact. You know, Toronto or Vancouver, maybe not so much here. I don’t know many first time home buyers that are buying properties at $800,000.
Impact of the election
They certainly do exist. And the conservatives said that they would increase the amortization in 30 years. Now, I don’t know how popular that’s going to be. I think in Halifax when we talk about the stress test. It’s not had a huge impact. If anything, I would say it’s almost had a zero impact here. I think that it was prudent to reduce the amortization of 25 years. I think it’s protecting Canadians. We don’t want we need to be protected from ourselves. We don’t want to have happened in Canada. What happened in the US?
Rick: [00:04:53] Yeah.
Clinton: [00:04:53] So I think that we’re going to see a lot of news and I think it’s definitely going to be busy until October 21st Election Day. And you know, we’re really excited about homeownership and we’re going to be on Saturday
Rick: [00:05:04] with Todd
Clinton: [00:05:05] we’re going to be on with Todd answering more questions. You never know. Maybe we’ll have an empire to phone in and give us their perspective on what’s going on with, you know, housing and the Halifax market.
Rick: [00:05:17] Alright.
Clinton: [00:05:17] You know, we’ll certainly be here to answer some calls and hopefully we can give you a bit more information. But I think it’s an exciting time.
Rick: [00:05:21] Interesting times for first-time homeowners, that’s for sure.
Clinton: [00:05:24] For sure.
Rick: [00:05:24] Clinton, thank you very much.
If you have any questions about Homeownership or what that means for your situation, get in touch with us here.