There were some new incentives in the recent federal budget that help first time home buyers.
Not a lot -- but it's better than nothing.
First, there is a First-Time Home Buyers' Tax Credit to help offset some closing costs like legal fees. What it amounts to in 2009 is you get $750 back.
Also, the home buyers' plan allows first time home buyers to take $25,000 out of an RRSP, up from $20,000. So for a couple it's $25,000 each.
Of course, if you've lost a bundle in your RRSP in the last year -- you may not have enough.
You still have to pay it back in 15 years so factor that repayment into your overall household budget. But the biggest benefit to first-time buyers now is lower prices.
The focus on first-time buyers is because without new buyers the market is a lot smaller. If you don't have first-time buyers at the bottom driving a "trade up" market --you'd have to have a lot of people moving down and that isn't as likely to happen. So if you make it easier for first-time buyers then the overall real estate market benefits.
The question always is 'Is it a good time to buy?" That has too many variables -- it's irresponsible for anyone to say "it's a good time to buy" for everyone. That's never true. But the current market has advantages that weren't here in the past few years. Lots of selection, lots of competition among sellers, which helps buyers, and you can take much more time to make a decision so that the decision is right for you. In other words we are returning to a more normal market.
And remember with any falling market -- you only know where the bottom is -- after prices have started going back up.
With a report from CTV British Columbia's Chris Olsen
