One politician claims he has been priced out of one of Canada’s hottest housing markets but, as one broker points out, he may be able to buy – if he decides to heed a professional’s advice.
“David Eby [claims he can’t] afford a $600,000 two bedroom condo, so he’s renting for $2,700 per month,” Dustan Woodhouse, a broker with Dominion Lending Centres Canadian Mortgage Experts, told MortgageBrokerNews.ca. “On a $600,000 purchase, if Mr. Eby had a 20% down payment, it would yield a mortgage of $480,000 and that would mean a mortgage payment of $1,920 a month.
“Significantly less than the $2,700 a month he’s paying in rent; even factoring in property taxes and condo fees.”
David Eby, an NDP member of legislative assembly, was recently profiled as part of a McLean’s story about the influence of foreign investment on Vancouver’s real estate market. He claimed to be priced out of the market.
“The Vancouver MLA, a lawyer touted as a future NDP leader, is among those priced out of the local market,” the McLean’s article says. “Eby and his wife, a nurse currently in medical school, recently sold their 530-sq.-ft., one-bedroom condo in Kitsilano, which was too cramped for the two of them and their 19-month-old toddler.”
“‘A two-bedroom condo in my constituency starts at $600,000—a non-starter for us,’ he says.
But, as Woodhouse pointed out, saving enough for a down payment would allow Eby to purchase a home – and lower his monthly housing expenses.
Not everyone can afford a 20% down payment, however. What if Eby were to put 5% down?
“If Mr. Eby could only scrape together a 5% down payment, then his mortgage payment would be $2,700 a month,” Woodhouse said. “At today’s interest rates, 55% of his collective payments would go straight towards principal. Less than half would be interest. But right now, he’s giving $2,700 away every month.”
Of course, Eby’s claim that he can’t afford a home could be a bit of political pandering. What better way to connect with potential voters than to share their plight.