First, there was the announcement as reported by Rob Shaw & Jennifer Saltman of the VSun:
Premier Christy Clark announced Thursday that a new provincially backed loan program would match the amount a first-time buyer has saved for a down payment — up to $37,500, or five per cent of the home’s purchase price...
Next, there was the analysis, as gathered by Mike Hager, Brett Jang and David Parkinson in the Globe (amongst many):
Joshua Gottlieb, an assistant professor at the University of B.C.’s Vancouver School of Economics, said the new loans are asking people to stretch themselves even further to achieve home ownership, a risky proposition if interest rates increase significantly in the future.
He called the policy a counterproductive taxpayer-funded subsidy for homeowners and developers. The roughly 15,000 new buyers a year the government estimates will take advantage of the new loans will hurt affordability further in a market constrained by a lack of supply, he said.
“The easiest way to think about it is with an analogy to a store having a sale,” Prof. Gottlieb said. “If they raise all of their prices by $200 and then give you a $200 discount, are you any better off?
“That’s effectively what’s going on here: It’s a $37,500 discount for first-time buyers so then the sellers can raise prices by however much extra those buyers are able to afford.”...
And, finally, there was the obvious as tweeted by the Ron of all Obviousness:
Is it possible that Mr. Obvious missed 23 characters and actually meant to tweet that it... Will help many 'get in over their heads' immensely?
After all, it's not like that underwaterish/drowning-in-debt thingy hasn't been concerning the Feds considerably for a good couple of years now.
Interestingly, the ceiling on the propped up 90% mortgage (i.e. really 95%) is $675,000 for families making less that $150K p/a....Which means that the max price is $750,000....Gosh...In Lotusland, who will be selling stock at that price I wonder.
And how much treasure will this give away to re-inflate the CondoKing bubble cost us?...Well, according to the Shaw/Saltman VSun report, the Clarklandian wizards are estimating that it will cost $700 million dollars of our taxes....errrrr...MSP premiums.
If you need a chuckle or three before the snow flies later tonight, go read the replies to Mr. Mason's twittery.
Oh, and don't forget that.... There is a fine group of very 'goodly'endorsed predatory lenders that are all set to make book on the back-end of underwater mortgages.