Taming the housing market: Real estate industry at odds with BC government

0

The BC Real Estate Association opposes the province’s plan to allow homebuyers to opt out of a sale within a seven-day “cooling off period.”

Content of the article

BC’s real estate industry and provincial finance minister Selina Robinson disagree on how to tame the frenzied real estate market.

Advertising

Content of the article

Last November, the province announced plans to introduce a “cooling-off period,” under which a buyer has seven days to change their mind and forgo a sale after agreeing to purchase a property.

On Monday, the BC Real Estate Association, which represents 24,000 real estate agents, pushed back against the plan.

“A ‘cooling off period’ is not the answer to alleviating the stresses consumers currently face in real estate transactions,” BCREA CEO Darlene Hyde said, citing analysis the group conducted over periods of similar thinking in other global jurisdictions. “Although attractive on the face of it, in a market characterized by low supply, such as ours, we believe that a cooling-off period will cause more problems than it solves.”

Advertising

Content of the article

Instead, the association is offering a “pre-offer period,” where buyers would have five days to research and get information about a property once it is listed, but before any offers are accepted.

In the case of the purchase of a condominium property, he offers to ensure that documents such as condominium regulations, depreciation reports, information on contingency reserve funds and copies of documents insurance are available when posting ads.

It’s all part of a 57-page white paper with 30 recommendations the industry has for dealing with current housing market conditions, which it has described as “unsustainable” with its bidding wars, scarcity supply and soaring prices.

The association said the B.C. government’s announcement in fall 2021 that it would implement a “cooling-off period” was made without broad consultation.

Advertising

Content of the article

Hyde estimates the province is 25,000 enrollments short of what is needed for a balanced market and said the lack of supply could be further exacerbated by the 70,000 to 80,000 immigrants BC expects This year.

On Monday, Robinson responded by saying the real estate association, as a commission-driven industry, has a vested interest in a hot market, but the government’s job is to make sure people are protected.

“I know many views on this, including the association’s suggestion of a pre-offer period. Pre-offer periods are unlikely to address concerns about buyer risk, may encourage multiple offer situations and have an unknown effect on house prices.

Larry Anderson, chairman of the Fraser Valley Real Estate Board, pointed out that the record housing market is due to a combination of other factors, including rock-bottom interest rates, major lifestyle changes and working habits due to COVID-19 and a very low inventory level.

Advertising

Content of the article

Alex Goseltine, chief executive of the BC Northern Real Estate Board, cautioned against “one size fits all” responses and said the “cooling off period” response appeared to be based on current market conditions only in specific parts of the city. province.

One academic argued that instead of calming the market, the so-called flexibility offered by the proposed ‘cooling off period’ could make the market even more prone to speculation.

Andrey Pavlov, who studies real estate finance at Simon Fraser University’s Beedie School of Business, likened it to being able to buy a plane ticket or book a hotel, knowing there’s no penalty for walking away from the purchase for a few days when these reservations will be much more expensive.

Advertising

Content of the article

He said a government-proposed cooling-off period would allow buyers to buy a house as a speculative financial asset, set the price and then decide whether or not to buy it for real a few days later without having to pay a percentage for this flexibility. He said the situation would favor experienced buyers with deep pockets who would find incentives to make many transactions in a way that first-time home buyers could not do so easily.

“We’ve all also heard the perspectives of mortgage brokers, home inspectors, and the experiences of potential home buyers about taking unfair risks to find a home in a hot market,” Robinson said. “Currently, the province’s real estate regulator is consulting on ways to introduce a cool down period that could be effective in British Columbia.

— With files from The Canadian Press

[email protected]


More news, fewer ads, faster loading times: Get unlimited, lightweight access to the Vancouver Sun, The Province, National Post and 13 other Canadian news sites for just $14/month or $140/year. Subscribe now via The Vancouver Sun Where Province.

Advertising

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. Visit our Community Rules for more information and details on how to adjust your E-mail settings.

Share.

Comments are closed.