Royal LePage CEO criticizes B.C housing policy

The British Columbia government’s announcement to help first-time buyers by introducing an interest free loan did not go down well with some economics and critics and Royal LePage’s CEO is also not taking it well.

The governments moves is considered as a pre-election strategy to win over voters and this is not a new technique as several governments have made use of the same politics in the past.  Furthermore, according to Royal LePage’s CEO the program the government wants to embark on is not sustainable as the housing market is very expensive.

Despite the fact that the loan will definitely help first-time buyers in achieving their dreams of owing a house, it does little to help the current crisis faced by the housing market. Instead it will only pile more pressure on the housing market as it will increase on the demand for houses and currently there is a shortage in the supply of new homes.

Moreover, the loan grated to first-time buyers will also increase on the household debts of Canadians as many will want to make good use of the opportunity given by the government.

Phil Soper went on to explain that its quite a fascinating situation as in one hand, the government’s policy will aid first-time buyers whilst in the other hand, it is damaging the housing market.

Previously the government had introduced a tax on foreign investors and now they are proposing an interest free loan to first-time buyers. This according to Soper “is definitely a pre-election politics. You hammer the Chinese and you add a carrot to the first-time buyers.”

But for the growth of the real estate industry it makes little sense how it helpful it will be.

Soper went on to add that the tax on foreign investors had led to a significant drop in home sales. There was a 40% drop in transactions in the wake of the implementation of the tax in the region.

In the initial stage, a lot of residents were with the opinion that foreign investors were responsible for the high housing prices but presently they are not buying again and the market is a total chaos.

In his view, Soper believes that the current housing trend will not be different in the coming year and adds that home prices will continue to rise in Ontario but this might be a slight change in British Columbia. However there will be a stable growth rate in 2017.