Potential Uptake of the First-Time Home Buyer Incentive

Summary Findings:

  • Evaluating the First-Time Home Buyer Incentive (FTHBI) based on its principle eligibility criteria, the highest potential uptake of the FTHBI would be in more affordable regions located outside of the Lower Mainland. In contrast, the lowest uptake would be in the Lower Mainland and Victoria, accounting for 44 per cent of sales. This suggests that the FTHBI is expected to have limited impact on provincial home sales.
  • Differences in the potential uptake of the FTHBI across the select regions is largely explained by the allowable maximum house price. As such, the price threshold is the most limiting in regions with higher house prices, which tend to be concentrated in the Lower Mainland and Victoria.
  • The maximum income threshold is less important to potential uptake because the share of first-time homebuyers meeting this threshold is relatively comparable across the select regions.

What is the First-Time Home Buyer Incentive?
On September 2, 2019 the Canada Mortgage and Housing Corporation launched the First-Time Home Buyer Incentive (“FTHBI”), with the aim of helping first-time homebuyers reduce their monthly mortgage payments without increasing their down payments. We describe the FTHBI in detail here.

To be eligible, a first-time homebuyer must have: 1) a minimum down payment of 5 per cent from traditional sources such as savings and RRSPs; 2) a maximum qualifying annual income of no more than $120,000; and 3) a loan amount of no more than 4 times a borrower’s qualifying annual income.

Using these criteria, we examine the potential uptake of the FTHBI in select regions in B.C., broadly representing the province’s 11 real estate boards.

What share of households would be eligible under the $120,000 maximum income threshold?
To be eligible for the FTHBI, first-time homebuyers may have a maximum qualifying annual income of no more than $120,0001. Using a Census 2016 custom tabulation from Statistics Canada on household annual income by age and tenure, we specify first-time homebuyers as renter households between the ages of 25 and 39; this represents the prime home buying age cohort. The data show that more than 65 per cent of first-time homebuyers in each select region would be eligible under the FTHBI’s maximum income threshold, with the lowest share in North Vancouver (66 per cent) and the highest in Penticton (86 per cent). Overall, the share of first-time homebuyers that meet the income criteria is relatively comparable across most regions.

What share of available homes would fall within the FTHBI eligibility criteria?
Using the FTHBI eligibility criteria, we calculate the maximum house price to be $505,2632, assuming a minimum down payment of 5 per cent3 and a maximum qualifying annual income of $120,000.

Using provincial assessment data on 2018 home sales, we find that the lowest shares of homes that would qualify are in North Vancouver (13 per cent) and the City of Vancouver (20 per cent). These regions combined made up 13 per cent of provincial sales in 2018. In contrast, the highest shares of homes that would qualify are in Dawson Creek (97 per cent) and Prince George (91 per cent), making up a combined share of 2 per cent of provincial sales.

The share differences in these select regions are reflective of house prices. For example, the average house price in North Vancouver ($1,092,969) is more than four times higher than in Dawson Creek ($250,348).

What does this mean in terms of the potential uptake of the FTHBI?
The highest potential uptake of the FTHBI would be in more affordable regions located outside of the Lower Mainland, which comprised 20 per cent of provincial sales in 2018. In contrast, the regions with the lowest potential uptake would be in the Lower Mainland4 and Victoria, which comprised 44 per cent of provincial sales5. This suggests that the FTHBI is expected to have limited impact on provincial home sales.

The potential uptake of the FTHBI is not particularly reliant on the income criteria because the share of first-time homebuyers exceeding the maximum income threshold are relatively comparable across the regions.

Unsurprisingly, the differences in the potential uptake of the FTHBI across the select regions is largely explained by the allowable maximum house price. As such, the price threshold is the most limiting in regions with higher house prices, which tends to be concentrated in the Lower Mainland and Victoria.

Appendix: Proposed Changes to the First Time Homebuyer Incentive
The Liberal Party announced on September 12 that if re-elected, it would expand the FTHBI in Toronto, Vancouver and Victoria. The expansion would increase the maximum qualifying annual income from $120,000 to $150,000 and increase the leverage factor from 4 times the maximum qualifying annual income to 5 times.

With a minimum down payment of 5 per cent and a maximum qualifying annual income of $150,000, these changes would increase the maximum house price from $505,263 to $789,4746. The impact would be most noticeable in the share of homes that would be eligible under the FTHBI. In the Lower Mainland, the share of eligible homes would increase from an average of 28 per cent to 62 per cent, and from 49 per cent to 78 per cent in Victoria.

Notes and References:

1. This is subject to qualifying income requirements set out by the mortgage lender and mortgage loan insurer. Examples of qualifying annual income include a salary before taxes and investment income.

2. Calculated as 4 times the maximum qualifying annual income of $120,000 divided by the fraction of the borrower’s minimum down payment of 5 per cent (i.e., 1-0.05).

3. A potential first-time homebuyer could put down up to a maximum of 14.99 per cent, which would then put the maximum house price at $565,000. A maximum of 14.99 per cent plus 5 per cent equity from the Government of Canada would place the borrower just under the 20 per cent threshold to qualify for an insured mortgage.

4. Lower Mainland includes Burnaby, Coquitlam, Langley, New Westminster, North Vancouver, Richmond, Surrey and Vancouver City.

5. The shares quoted here do not add up to 100 per cent because we only include select regions in B.C. 6. Changing the income threshold has no impact on the share of eligible first-time homebuyers, except for a minimal impact in Vancouver (increase of 1 per cent).

For more information, please contact:
Brendon Ogmundson
Deputy Chief Economist
Direct: 604.742.2796
Mobile: 604.505.6793

Kellie Fong
Direct: 778.357.0831
Mobile: 604-366-6511

REALTORS® and Radon: Protecting Buyers and Sellers

Radon, a naturally occurring odourless and colourless radioactive gas, may be out of sight but it certainly shouldn’t be out of mind when it comes to real estate transactions. In fact, radon is present at different concentrations (depending on the makeup of bedrock or sediment) throughout Canada. If radon levels are too high in a home, the health risks are so significant that it becomes a material latent defect. But understanding radon risks is more than just a professional responsibility under the Real Estate Council of British Columbia’s Professional Standards Manual. It’s an opportunity to give clients peace of mind as they make the biggest financial decision of their lives.

How radon enters a home
Radon typically seeps through the ground and into buildings through cracks in the foundation and/or floor slabs. According to the Canadian Real Estate Association’s Homeowners Guide to Radon, radon can also enter through other openings, like unfinished dirt floors, window casements or gaps around service pipes. Factors like bedrock and soil types, soil moisture level, and seasonal temperature fluctuations also influence indoor radon levels.

Radon and lung cancer
High levels of radon in a home is the second leading cause of lung cancer in Canadians. A report from the Canadian Association of Radon Scientists and Technologists (CARST) explains why:

When inhaled, radon gas particles remain in lung tissue and begin to decay. As the radon particles decay, they release bursts of radiation that can damage the lung tissue cells. Over time, the cell damage can lead to the development of lung cancer.

What is considered a “high level” of radon? While Health Canada advises Canadians to pursue a radon level “as low as reasonably achievable,” 200 becquerels per cubic metre is considered the maximum allowable. There is no lowest threshold, as risk of lung cancer increases with radon concentration. For that reason, the World Health Organization suggests homeowners take action if concentrations are over 100 becquerels.

Testing and mitigation
The good news about radon is that testing and mitigation are relatively affordable and easy. Anyone can test their home for radon. All it takes is a radon testing device that can be found at stores like Home Hardware, Walmart or Home Depot or ordered online from the BC Lung Association’s RadonAware homepage.

While radon mitigation is also relatively straightforward, it’s best to hire a radon mitigation specialist certified by the Canadian – National Radon Proficiency Program (C-NRPP) to take on the job, which can cost between $500 – $3000 depending on the size and style of the home. Fixes can involve improving ventilation, sealing cracks in foundation walls and floors, or installing a depressurization system to draw radon away from the basement.

Your responsibilities as a REALTOR®
Above all, don’t forget that if a property has been tested for radon and shown to have levels above 200 becquerels per cubic metre, this is a material latent defect. If you’re representing a client selling such a property, you must disclose this information in the Property Disclosure Statement. But there’s more to upholding professional standards than just disclosure when it comes to radon. Here’s how you can help:

  • First, educate yourself about radon. There are many good sources such as Health Canada and Take Action on Radon. The Real Estate Council of Alberta has also prepared a checklist for realtors working for sellers and another one for buyers.
  • Educating yourself about radon also means understanding the radon levels in the region where you do business. Health CanadaRadonAware, and the British Columbia Centre for Disease Control all offer great resources.
  • Participate in BC Lung Association’s Radon in Real Estate project. Take an online survey to test your knowledge of radon, learn about upcoming workshops and webinars for real estate professionals, and even watch one-on-one interviews with researchers.
  • Ask sellers if they have had radon testing done. If they have, ask for a copy of the test results. If test results fall below 100 becquerels per cubic metre, this is an added selling feature.
  • If it is 200 becquerels or higher and remediation hasn’t been done, be sure your client understands your duty to disclose this as a material latent defect.
  • If your seller has already done remediation using a C-NRPP certified professional, ask for confirmation that the work has been done and that the radon levels are now in safe zones. Completed remediation is another selling point to highlight.
  • In cases where remediation hasn’t been done, you can add value to your client by connecting them with a C-NRPP certified professional to get the work done.
  • When representing a buyer, consider including a radon holdback (retention) clause in the contract. This involves the buyer and seller agreeing to set aside a sum of money from the purchase price that is likely to be enough to cover the cost of a typical radon remediation system. The money is held by a third party (for example, a solicitor) until the test result is known and any reduction measures have been done. If the test shows low radon levels and that no further action is necessary, the bond money is released to the seller. If the test shows that high radon levels are present and that remediation is necessary, the work is paid for from the bond money; any excess is released to the seller.
  • If your buyer is planning on doing major renovations after buying, make sure they understand that this could impact radon levels in the home, even if it has been remediated in the past.

Posted by: April van Ert

JUST ANNOUNCED: Penticton to Welcome KIDZ BOP, the #1 Music Brand for Kids, in March 2020!

KIDZ BOP World Tour

Saturday, March 7, 2020
South Okanagan Events Centre – Penticton, BC
Doors: 6:00PM | Show: 7:00PM

Tickets: Start at $35.00 (additional fees apply)


KIDZ BOP, the #1 music brand for kids, in partnership with Live Nation, announced today The KIDZ BOP Kids first-ever headlining Canadian tour with a stop in Penticton on Saturday, March 7.

The KIDZ BOP Kids, Billboard Magazine’s “#1 Kids’ Artist” for nine consecutive years, are bringing their interactive family-friendly concert experience to new cities and will perform some of today’s biggest global pop hits live on stage. The concert features awesome set design, costumes, exciting choreography, and tons of cool surprises! Dads even have the chance to show off their best dance moves on stage during the “Daddy Dance Off.”

Tickets start at $35.00* and go on sale Friday, September 27 at 10:00AM. Tied to the fall leg of the KIDZ BOP World Tour 2019, KIDZ BOP will release their new album, KIDZ BOP 40, on November 15.

KIDZ BOP World Tour 2020 Canada Dates

21-February – London, ON – Centennial Hall
22-February – Kitchener, ON – Centre In The Sqaure
23-February – Hamilton, ON – FirstOntario Concert Hall
28-February – Winnipeg, MB – Burton Cummings Theatre
29-February – Regina – Conexus Arts Centre
1-March – Saskatoon, SK – TCU Place
6-March – Calgary, AB – Southern Alberta Jubilee Auditorium
7-March – Penticton, BC – South Okanagan Events Centre
8-March – Vancouver, BC – Doug Mitchell Thunderbird Sports Centre

KIDZ BOP connects with kids and families through its best-selling albums, music videos, consumer products and live tours. In the US, KIDZ BOP is the No. 1 music brand for kids, featuring today’s biggest hits “sung by kids for kids.” KIDZ BOP has sold over 20 million albums and generated over 3 billion streams since the family-friendly music brand debuted in 2001. The best-selling series has had 24 Top 10 debuts on the Billboard 200 Chart; only three artists in history—The Beatles, The Rolling Stones, and Barbra Streisand—have had more Top 10 albums. For more information, visit www.kidzbop.com.

Tour Sponsors
Subway Fresh Fit for Kids® and KIDZ BOP Radio on SiriusXM’s Channel 77 are official partners of the KIDZ BOP World Tour 2019. Subway Fresh Fit for Kids® is a leader in offering on-the-go families balanced, customizable meals, and better-for-you kids’ meals. SiriusXM’s KIDZ BOP Radio (Ch. 77) features The KIDZ BOP Kids hosting a 24/7 party, which includes today’s biggest hits, sung by kids for kids.

Mortgage Rate Forecast


  • Stress test limiting impact of falling mortgage rates
  • Canadian economy: Strong second quarter, but will it last?
  • Bank of Canada on hold for now

Mortgage Rate Outlook
Canadian mortgage rates continued to decline in the third quarter as rising trade tensions between the United States and China fed growing fears of a global economic slowdown. Those fears pulled long-term Canadian interest rates low enough to invert the Canadian yield curve, a frequent—though not infallible—pre cursor to recession.

As bond yields fell, the average 5-year contract rate offered by Canadian lenders declined to an average of 2.86 per cent, with 5-year fixed rates as low as 2.25 per cent currently available. The 5-year insured rate, however, which given the decline in contract rates is currently the stress test rate for both insured and uninsured borrowers, has remained stubbornly unflinching. As a result, borrowers subject to the B20 stress test are now forced to qualify at a risk buffer (stress test rate minus contract rate) of approximately 250 basis points.

The unpredictability of US trade policy makes the future direction of interest rates cloudier than usual. Indeed, current Canadian economic conditions—a historically low unemployment rate and inflation near its 2 per cent target—would not normally engender speculation of looser monetary policy. However, when the outlook for the global economy can change with a Tweet, markets trade on fear rather than data.

While interest rates have recently bounced off their lows, global risk remains tilted to the downside. Our baseline forecast is for 5-year fixed rates to remain relatively constant over the next year at 2.77 per cent. As for the 5-year qualifying rate for insured mortgages, its lack of variation remains a puzzle. While underlying 5-year bond yields were once a reliable guide to movements in the qualifying rate, that relationship appears to have changed. The statistical relationship between 5-year fixed rates and the 5-year government bond yield has deteriorated since the financial crisis of 2008 and even more so with the introduction of tighter qualifying rules for insured borrowers in 2016. Our base case is therefore for the qualifying rate to remain unchanged over the next year.

Economic Outlook
After faltering for two quarters, Canadian economic growth appeared robust in the second quarter, registering a two-year high of 3.7 per cent. However, the details underlying the near 4 per cent rise in real GDP were less optimistic. Business investment contracted nearly 7 per cent at an annualized rate, driven by a 16 per cent decline in spending on non-residential structures, and machinery and equipment. Second quarter household spending slowed to just 0.5 per cent, the lowest reading since the first quarter of 2015. A 13 per cent jump in exports following nearly a year of flat or even negative quarters was the main driver of growth, a feat which is unlikely to be repeated. Given those details, we expect that growth will moderate to between 1.5 and 2 per cent in the second half of 2019.

We expect the Canadian economy will post trend growth of about 1.8 per cent in 2020, though significant downside risks remain due to elevated trade tensions and their consequent impact on exports and investment.

Interest Rate Outlook
The Bank of Canada has remained on hold for much of the past year, opting to not follow the majority of other global central banks in lowering its policy rate. However, it has left the door open to lowering rates should developments in the global economy warrant doing so.

Whether the US Federal Reserve opts to follow up its recent 25 basis point rate cut with something more aggressive will be important to how the Bank of Canada sets its own rate going forward. With the US Federal Funds rate now essentially parallel to the Bank of Canada’s policy rate, a further cut by the Fed may place upward pressure on the Canadian loonie, which would exacerbate an already strained climate for exports and lower the outlook for Canadian economic growth.

Currently, the baseline outlook for the Canadian economy is not signalling the need for further stimulus. Core inflation is expected to trend at the Bank’s 2 per cent target and growth is near potential. Moreover, policymakers remain weary of re-igniting a build-up in household debt, particularly after imposing policies designed to bring those debt burdens down.

We expect the Bank will therefore remain on hold as long as the Bank’s assessment of economic risk does not reach a tipping point.

For more information, please contact:
Brendon Ogmundson
Deputy Chief Economist
Direct: 604.742.2796
Mobile: 604.505.6793

Kellie Fong
Direct: 778.357.0831
Mobile: 604-366-6511

Johnny Reid’s “My Kind of Christmas Tour” ❄️⛄

Seating Map:
December 13 @ 7:00 pm – 9:30 pm
Tickets go on sale: September 27, 2019 10:00 am
Doors Open: 6:00 pm
Ticket Prices: Tickets start at $39.50 (additional fees apply)


Widely known for his energetic stage performances, Johnny will embark on a national cross-Canada My Kind Of Christmas Tour that will cover 23 dates including a stop in Penticton at the South Okanagan Events Centre on Friday, December 14.

Already a chart-topping, multi-platinum selling artist in Canada, Johnny’s songwriting resonates with audiences across the globe and that will continue with this new Christmas EP, a perfect mix of originally penned ‘soon to be holiday favorites’ including “My Kind Of Christmas” with a Johnny Reid take on some hidden holiday gems including “Merry Christmas Everyone”, a classic brought back to life in the 80’s UK pop phenom ‘Shakin’ Stevens. See the full track listing below.

Since arriving on the music scene over 10 years ago, critically acclaimed singer songwriter, Johnny Reid has captured the hearts of fans and audiences around the world. Born and raised in Lanark, Scotland, the blue collared soul singer is widely known for his lyrical honesty and musical ability, as demonstrated by album sales totaling over 1 million units, countless awards and multiple SOLD OUT national arena tours.

Tickets for the tour start at $39.50* and will go on sale to the general public on Friday, September 27 at 10am. Tickets can be purchased in person at the Valley First Box Office, over the phone 1-877-763-2849 or online at www.ValleyFirstTix.com. Fans can also visit Johnny Reid’s website for exclusive presale details.

10th Annual Culture Days

Presenter: Various non-profits, businesses, collectives and artists
Location: Various locations around Kelowna
Price: All activities are free

Take part in Canada’s largest public participation campaign for the arts!

Culture Days is an annual, national celebration of arts and culture that brings together the local arts community to collaborate on providing free activities and events for the public. This year is the 10th anniversary and the theme this year is “Creativity, the Arts and Well-being”.

All activities, workshops and performances are free for the entire community to enjoy. Check out the schedule online and get involved!

Open House in Penticton Main North, Penticton

Photo Link

We invite everyone to visit our open house at 254 Scott Ave on 21 Sep 2019, 11:00 AM

TOP floor north facing unit features 2 bedroom and 2 baths, 1177 square feet, kitchen nook and a den or dining area. The rooms are spacious, with a gas fireplace in the living room and an outdoor patio area. Great views of the mountains and surrounding areas. Vaulted Ceiling in the kitchen area. Radiant in floor heating and gas are included in the strata and a guest suite is available. Includes Fridge, Stove, Dishwasher, all window coverings, Washer and Dryer. Walk to just about everything from this central location in the Scottsdale a popular 55+ building, no rentals, small pet on approval. Check out the Gathering room, with a 1 Bedroom suite for guests, and outside grassy area with patio. 1 Storage locker located on the same floor as your condo, 1 underground parking stall. Beautiful apartment, hurry won’t last.

Click here for: Property information

BC Homes Sales Set to Normalize in 2020

Vancouver, BC – September 5, 2019. The British Columbia Real Estate Association (BCREA) released its 2019 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 5 per cent to about 75,000 units this year, after recording 78,505 residential sales in 2018. MLS® residential sales are forecast to increase 11 per cent to 82,700 units in 2020, just below the 10-year average for MLS® residential sales of 85,800 units.

“BC markets are showing signs of recovery after nearly a year and a half of policy-induced declines,” said Brendon Ogmundson, BCREA Deputy Chief Economist. “We expect that recovery to continue into next year, with home sales normalizing around long-term averages.”

A recovery in home sales has slowed the accumulation of resale inventory, with active listings still well short of the previous peak in 2012. That leaves market conditions at the provincial level essentially balanced with little upward pressure on prices. We anticipate that the MLS® average price will decline 2.4 per cent in 2019 before rising modestly by 3 per cent to $718,000 in 2020.