Government “Support” to First Time Buyers

by Albert Meyer

To the BBC

Government housing assistance: Please bring someone into the studio to debunk the myth that government can “help” first-time home-buyers, or anyone for that matter. (I suggest Dr. Sean Gabb of the Libertarian Alliance.)

The crux of the issue is the assertion that government subsidies push up prices. If government “assistance” equates to 5% of the purchase price, sellers would use this as an opportunity to increase their asking price by 5% or close to 5%, negating much of the “help.”

This silly experiment was tried in the US through their infamous Fannie Mae and Freddie Mac entities. No such entities or government assistance programs were available in Canada. Canada did not experiencing the housing bubble that sank the US housing market and home ownership as a percentage of households is higher in Canada than the US. Proof positive that the government should stay out of the housing market. It should stay out of all markets. The easiest way to make mobile phone ownership unaffordable is for the government to start offering subsidies.

The manner in which the BBC announces this home-ownership assistance program creates the impression in the minds of listeners that this “help” is a positive measure to kick-start the housing market, which just perpetuating the myth. This is an appeal to the BBC to be more objective and question conventional wisdom.

One response to “Government “Support” to First Time Buyers

  1. Didn’t know about Canada.Thanks for the info.