Each week, the Real Estate Therapist radio show on Roundhouse Radio 98.3FM, hosted by REW.ca editor Joannah Connolly, offers information and advice on the Lower Mainland real estate market, drawing on the expertise of an industry guest. In the third of our weekly series on five key takeaways from the show, the February 25 edition's guest, Bob de Wit, CEO of the Greater Vancouver Home Builders’ Association, shares his expert insights on home renovation and government incentives for buyers.
To listen to the full interview, click here – and for the audio clips on each of the topics below, use the slider to scroll to the minute-mark cited.
1. The new first-time buyer Property Transfer Tax exemption is not enough – but last year’s PTT exemption on new homes was a game-changer for buyers, argues de Wit. “[The new-home exemption] has absolutely made a difference – just by definition, that relief has made a lot of difference for a lot of buyers… As opposed to the Budget change we just had for PTT, where the amount is very minor and only affects decisions made at the margin, the change to the new home exemption [last year] was a big chunk of money, so it allowed people to change the communities they were considering, and the housing forms that they were considering, so I think it had a big impact – relative to the change that we just saw. (Clip starts 10 mins 18 secs)
2. The most common mistake in home builds or renovations is not properly outlining scope of work. In conversation with phone-in guest Mike Holmes Jr. of HGTV’s Holmes + Holmes TV show, the building experts agreed that many people renovating their home or having one built make the mistake of being on the same page with the contractor about the work needed. De Wit says, “The biggest mistake I see is when consumers and contractors don’t get together on a contract and clearly outline what the work is to be done – and misunderstandings arise from that.” Holmes agreed and said, “One of my biggest mistakes was also not budgeting enough – at first I wanted to just do lipstick and mascara, which is what my Dad and I always tell people not to do. We always tell people to do it right and renovate from the outside in. Luckily my Dad was there to remind me about what we tell people all the time. That’s what I want to help people learn – prioritizing your renovation. There’s a certain order that you have to do things.” (Clip starts 15 mins 18 secs)
3. Barnboard is the hottest trend in home renovation and décor right now – from feature walls to headboards to tables. “A couple of my brothers are farmers, and in their community a lot of the older barns are made from old-growth Douglas fir home-sawn wood so it’s fabulous wood,” says de Wit. “So when these barns come down, people come out of the woodwork to recover and reuse that barnboard." TV contractor Holmes said, “This wood is a hot commodity, those barns are becoming harder and harder to find… and it’s a huge trend that’s taken over.” (Clip starts 19 mins 05 secs)
4. Buyers who stretch themselves enough to get a mortgage helper will benefit. De Wit explains that buyers have the option of new government programs such as the BC HOME down payment loan program that could help them get a larger first property. “Look for a product that you can stretch into, because of the HOME program, such as a townhouse or a house further out, that has a mortgage helper,” says de Wit. He adds that mortgage helpers don’t have to be traditional basement suites in detached homes, and that innovative solutions to ease those monthly payments are increasingly coming into play. “One of the things I’m seeing, which is a trend, is lock-ups in condos. It’s like having a basement suite, but in a two-bedroom condo. You lock off one of the suites, which has a half-bathroom or ensuite, and then you’d have a shared kitchen… It brings to mind living in dorms, which doesn’t sound ideal but at least it allows people to get into homeownership.” (Clip starts 30 mins)
5. The new BC HOME down payment program is, on balance, a good thing. “It will counteract the federal stress test, and that’s a good thing,” argues de Wit. “The federal stress test was implemented to introduce household debt in Canada, which is a fine idea – but they are doing it by preventing many Canadians, mostly Millennials, from getting mortgages. They want Millennials, instead of buying a home and building equity, to not buy a home and spend money. I think that’s the wrong way to reduce household debt. So when the BC government came up with the HOME program and re-enabled people to get into home ownership, I thought that was a great thing. I’d rather see someone who is house poor but building equity, in something they are proud of and can live in, than somebody not build up equity and spend for the sake of the Canadian economy. That doesn’t make any sense to me.” (Clip starts 40 mins)