A government bonus for new homebuyers – tied to new construction purchases – has worried B.C. brokers, but has ultimately proven “harmless,” say some industry players.
“You might logically think that the B.C. First Time New Home Buyers Bonus would steal business away from us,” said Jackson Cunningham, a sub-broker for The Mortgage Group in Vancouver. “But it has made a smaller splash than expected.”
In a move to boost the province’s new home construction market, the B.C. government launched the program, which provides first-time homebuyers a one-time bonus amounting to five per cent of their new home purchase or up to $10,000. In effect, it serves to take the bite off the HST, which is charged on new home purchases. The offer is good until March 31, 2013.
Although the bonus is a very popular incentive for consumers, the new home market is not a particularly strong one for many brokers, largely shut out of development showrooms by builders in partnership with bank reps.
However, Cunningham and brokers who spoke to MortgagebrokerNews.ca said the offer has hardly put a dent in their business.
“If my business were affected it was hardly noticeable,” Cunningham said.
Some brokers have even been successful in using the bonus as a marketing tool.
“The most frequent questions I get from first-time homebuyers are around the bonus,” said Scott Dawson, broker for Verico – Paragon Pacific Mortgage Inc., “Being able to answer their questions about the bonus breaks the ice and raises their confidence with me.”
Still another broker claims that the bonus has been a boost for business.
“It has definitely brought a lot of business our way,” said Paul Sobieski, another Vancouver-based professionals with TMG. “I think as much as 50 per cent of my deals this year came from people who want to avail themselves of the bonus.”
Majority of these transactions are done through new home developers, but he pointed out that it is a hard market for brokers to break into.
“I have many project contacts since it is a market I used to service earlier in my carrier,” Sobieski said. “The bonus encouraged me to tap into this network again.”