The real estate market is once again a hot topic in Canada. As usual, the housing market in British Columbia continues to dominate the headlines. Per the British Columbia Real Estate Association, a record of 124.854 residential unit sales was registered. This is a 1 third increase over sales in 2020.[1] The market, as we enter into 2022, is not expected to be as vigorous as 2021, but still strong, and settle “back to a level that is broadly in-line with long-run trends.”[2] Currently, mayors across British Columbia are asking Premier Horgan to take action on affordable housing.[3] Many are expecting action, with the majority of B.C. residents hoping and trusting the NDP to do something about affordable housing.[4]
British Columbia has recently discussed a few reforms towards real estate consumer protection, primarily using the B.C. Financial Services Authority to establish and implement them. Amid new COVID restrictions, B.C. is also looking at ways to provide homeowners with relief. These recent changes stand to be significant for B.C. residents and all of Canada, as when the B.C. government acts, other provinces are always watching.
Cooling off periods are coming: Regulatory action
This past November, the Ministry of Finance announced their intent to create a regulation implementing cooling off periods in the sale of B.C. homes.[5] The proposed regulation is still developing, but it is similar to rules for pre-construction condos in B.C., which have a 7-days cooling off period. Finance Minister Selina Robinson hopes that the regulation will reduce the current market’s volatility.
Cooling off periods have been instituted in other provinces as well. In Ontario, consumer protection legislation creates a cooling off period for newly built condos. Consumers can rescind their offer to buy without penalty 10 days after receiving the fully signed purchase agreement. Where B.C. differs from most is planning to institute the cooling off period for homes, rather than just condos.[6]
Cooling off periods increase consumer power and allow them to take more time to evaluate their buying decision and decide what is best for them. However, some real estate professionals are skeptical that this proposed regulation will benefit consumers in the long run. B.C. Realtor Alex Dunbar, to Storeys.com, states that such a policy may make sellers solely consider offers on price, rather than thinking lower offers that come from buyers who are less like to back out. By putting everyone on an even playing field, and everyone having the ability to back out, buyers will compete on price even further, causing the market to still be volatile and trend upwards.[7]
Participate in the regulatory consultation process
On the other hand, because cooling off periods have already been used for pre-built condos, perhaps the concerns are overblown. The good news is that the regulation is still in its consultation phase. The BC Financial Services Authority is consulting relevant stakeholders for feedback about the proposed rule. While the BCFSA has already and continues to engage with industry associations and real estate boards, anyone can make their voice heard and provide input to [email protected]. The Ministry of Finance will be reviewing all communications for feedback on the proposed regulation.[8] After the consultation is finished in mid-February, the legislation will begin to solidify, and stakeholders can then properly ascertain the effect of the new legislation.[9]
Consultation for the future, Homeowner Grant for Now
The consultation period for the cooling off period may very well end up being very impactful to the near future of B.C.’s real estate market. However, today, many are looking for help. With the COVID-19 Omicron variant causing provinces to implement new restrictions, the B.C. government has responded by setting their Homer Owner Grant threshold at $1.975 million for 2022.[10] Over 92% of residential properties can now receive assistance for their property taxes.
The grant varies based on location, with those in northern or rural areas eligible for more than those in Metro Vancouver, Fraser Valley and Capital Regional Districts. Homeowners 65 or older, or those with disabilities or who live with a relative with a disability, also qualify for more aid. The “fastest and easiest way to apply” for the grant is on the B.C. government website.
Change is coming, but what change?
B.C. is but one jurisdiction looking at reforms for dealing with the housing market. As the new year continues, we will continue to see pushes for new legislation and consultation periods to let stakeholders be heard. Take advantage of any opportunity to voice your concern or support new regulations. For the right now, for those that need help, it is important to look at the various programs that give homeowners, landlords and renters assistance.
[1] BRCEA: A record Year for the B.C. Housing Market: https://www.bcrea.bc.ca/economics/a-record-year-for-the-bc-housing-market/
[2] REMAX: B.C. Housing Market Projected to Remain Strong in 2022: https://blog.remax.ca/bc-housing-market-projected-to-remain-strong-in-2022/
[3] CBC: B.C.’s urban mayors demand urgent provincial action on complex housing needs: https://www.cbc.ca/news/canada/british-columbia/bc-mayors-housing-call-1.6311158
[4] Business Intelligence for B.C.: Most B.C. residents trust BC NDP to resolve affordable housing issues: poll
[5] CTV NEWS: ‘Cooling off periods’ part of B.C. real estate plan to protect buyers wanting to back out: https://bc.ctvnews.ca/cooling-off-periods-part-of-b-c-real-estate-plan-to-protect-buyers-wanting-to-back-out-1.5652568
[6] RECO: Do real estate contracts have a cooling off period? https://www.reco.on.ca/ask-joe-question/do-real-estate-contracts-have-a-cooling-off-period/
[7] Storeys: Will BC’s New ‘Cooling Off Period’ Really Turn Down the Heat in its Housing Market? https://storeys.com/british-columbia-housing-market-cooling-off-period-work/
[8] BCFSA: Real Estate Consultations https://www.bcfsa.ca/about-us/who-we-are/stakeholders#cooling-off-period-and-real-estate-consumer-protection
[9] BCFSA: Real Estate Consultation Launch https://www.bcfsa.ca/about-us/news/news-release/real-estate-consultation-launch
[10] B.C. Gov News: Home Owner Grant helps people with property taxes https://news.gov.bc.ca/releases/2022FIN0001-000004
