The British Columbia Real Estate Association (BCREA) announced their “whitepaper“, outlining proposed solutions to address the housing crisis both in the province and across the country. BCREA is recommending a “pre-offer period” where offers cannot be presented to a seller on new listings until the listings have been posted for five business days (for a fee). During which you have the option to back out. Similar to the 7-day rescission period for new developments.
Isn’t this already in place? The Direction Regarding Presentation of Offers does exactly that if I’m not mistaken. The property is listed during the week, open house on the weekend, and offers if any are presented to the seller the following week. You can pay for a pre-inspection or pre-appraisal prior to submitting an offer. These measures seem counter-productive and further encourage speculation and bottlenecks. It is essentially saying: “Let me hold up multiple properties for 5 days until I make up my mind with minimal consequences.” Taken at face value, BCREA’s plans don’t provide much assurance as to whether any of the policies will have a measurable effect.
The real estate boards had even stated they do not possess buyer profile data. Are they first-time homebuyers? Investors? Only the real estate agents on the front lines seem privy to this data, and there are no requirements to report it. Only your government-issued identification and nature of work are required as per FINTRAC.
It’s important to note that while the public may point fingers at foreign buyers and investors, make no mistake the issue is domestic demand. Investors are in fact increasing the supply of rental housing. There is no loss in supply. If the buyer chooses to leave it empty, they are subject to the Empty Homes Tax (3% of the assessed value) and Speculation and Vacancy Tax (0.5% of the assessed value).
“We support measures that strengthen consumer protection and improve housing affordability and supply in our region. To find policy approaches that benefit current and hopeful home buyers as well as home sellers and owners requires a thorough understanding of how real estate transactions occur at every stage. Policymakers can only strike this delicate balance by consulting industry experts. This is why we urge our regulator and provincial government to deeply consider BCREA’s recommendations before implementing new requirements for home buyers and sellers in BC to follow.”– Taylor Biggar, REBGV Chair
Sounds like a lot of filler words to state that there’s no clear way out of this mess. Other recommendations in the white paper fall into four core categories:
- improving housing affordability;
- enhancing consumer protection in transactions;
- evolving the real estate sector; and
- creating a world-leading regulatory structure.
The Government of British Columbia is considering removing some housing approval powers from local governments. This is an effort to get more homes built by removing the Municipal bottlenecks as they are not approving enough housing for our population growth. It might have some weight, knowing personally how lengthy the process can be when applying for City permits. They have not done anything to make it cheaper or faster over the last 5-10 years. Deeply concerning.
Canada is expected to receive 400,000 immigrants, 80,000 to BC, including refugees from Ukraine this year. We need housing, and we need it fast. Canada had the lowest number of housing units in relation to population out of the G7. There was a deficit of 25,000 listings. There have been talks of creating a permanent housing round-table, bringing together all housing market stakeholders; Federal, Provincial, and Municipal to formally tackle these issues.
Buyers are most often sellers first. The current sentiment is one of hesitation: “if I sell now, where am I going to go?” A dilemma we see in high volumes, though not every buyer is making a lifestyle change, or has the constraint of time or financing. The proposal is meant to take frenzy and panic out of the offer situation. The impetus to make hasty decisions. I say the aforementioned responsibility lies with those who work directly with buyers and sellers. The agents. Not some abstract policy.