A local realtor said a provincial housing program for first-time home buyers is coming at a time when the local real estate market is set for an upturn.
Garry Gratton with ReMax Penticton noted historical trends point to a positive outlook for Penticton and area real estate.
“For seven years from 2008 to 2015 we’ve basically been in a down market and now we’re finally at the beginning of what I see and what I fully believe to be a fabulous turnaround,” Gratton said.
In November the B.C. Real Estate Association released a forecast with an expected decline of 16 to 17 per cent in residential home sales next year in the Okanagan and surrounding areas. However, housing demand is expected to remain above long-term averages, with much of the existing momentum carrying through 2017.
Gratton noted that forecasts are always a matter of predicting the future, he prefers paying attention to the historical facts and data. There is a potential domino effect to be had from the recently announced B.C. Home Owner Mortgage and Equity Partnership program from the provincial government, which Gratton expects will stimulate the upturn.
“The domino effect is a really good way to explain it because it doesn’t matter who buys or who sells there’s always a long-term effect throughout the economy,” Gratton said. “In this particular case in regards to the first-time home buyers partnership program from the provincial government. It definitely does have a stimulating effect, specifically because of the domino effect.”
His advice to those considering becoming homeowners? Buy now.
“Seize this unique, one-of-a-kind opportunity. Start building your equity by buying a home now, sooner rather than later. You have an opportunity here for five years to build equity towards your own successful financial future,” said Gratton, who also sits on the City of Penticton’s housing affordability committee.
Penticton MLA Dan Ashton highlighted the Okanagan as a bright spot in B.C. real estate during a press conference held at a show home in the Sendero Canyon development.
The average purchase price for a residential detached house is approximately $475,000.
“Our region is the shining envy of many places in Canada and North America. We have real golden opportunity here in the Okanagan. There will be some places where we do see probably some settlement in not only in pricing, but also in people moving to the area. But the Okanagan, of all places to live in the province of British Columbia, the Okanagan is the shining star,” Ashton said. “I mentioned (Penticton Mayor) Andrew (Jakubeit) several times purposely because I know that the city is continuing to try to push to get job creation here. When I drop back onto the jobs that have been created in this subdivision alone for the trades, it’s that type of opportunity that Penticton is presenting at this point in time and this makes a really big difference.”
The provincial program contributes to the amount first-time homebuyers have already saved for their down payment, providing up to $37,500, or up to five per cent of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years. Also during the first five years, no monthly interest or principal payments are required as long as the home remains the homebuyer’s principal residence. After the first five years, homebuyers begin making monthly payments at current interest rates.
Homebuyers will repay the loan over the remaining 20 years, but may make extra payments or repay it in full at any time without penalty, and the home must be repaid in full when the home is sold or transferred to another owner.
The province is investing about $703 million over the next three years to help an estimated 42,000 B.C. households enter the market.