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Home downpayment loans miss real issue

The move by the BC Liberal government in late December to float loans to people who can’t afford home downpayments makes zero sense.

The move by the BC Liberal government in late December to float loans to people who can’t afford home downpayments makes zero sense.

The government is going to start offering up to $37,500, or five per cent of the total cost of the home, to first-time homebuyers for their downpayments, matching what cash these homeowning hopefuls have stashed away. This loan will be interest-free and must be payed back over 25 years.

There will be no payments required for the first five years.

In our opinion, this just encourages people to take on more debt than they can manage. We cannot fathom how our provincial leaders think this is a good thing.

This is a recipe for people to default on a whole pile of money at the taxpayers’ expense.

The idea of requiring a downpayment is, at least in part, to prove that you are fiscally responsible enough to be able to take on the rest of the debt.

It’s probably the biggest purchase most people will make in their lifetimes.

Recent changes to mortgage rules in Canada were made so that not as many people would end up taking on mortgages they couldn’t afford.

This just completely negates those efforts.

It does absolutely nothing to address the real problem: housing affordability.

All that cash is going to come due. Houses aren’t magically going to come down in cost relative to people’s salaries. Which is the nub of the issue.

We cannot imagine what the Liberals are thinking with this move. It’s absolutely astonishing that they would go in this direction. To whom are they hoping to appeal?

They must believe they are buoying their popularity with some demographic somewhere or they wouldn’t do it this close to an election.

In the long run, who does this really benefit? Not the public, who will be left holding the financial bag, and not the people who will be lulled into thinking they can take on more house than they can really manage.

This is just more make believe, pretending the cost of homes in so many markets across Canada aren’t totally out of whack with what the people there take home from their jobs.

It just further paints the unrealistic picture that home ownership is a dream to which everyone can reasonably aspire.

What we really need are serious steps towards affordable housing, like the two affordable housing projects in the works in North Cowichan.

We also think more credence should be given to the idea of tiny homes. At least it’s a viable place to start for those who want something of their own, but can’t afford a traditional home in our expensive markets.