British Columbia’s real estate board has outlined upwards of 30 recommendations for the provincial government that are aimed at tackling some of the housing market’s most pressing matters.
In a press release today, the British Columbia Real Estate Association (BCREA) announced it had published a white paper and a number of recommendations for the BC government that examine concerns with the province’s housing market, including the real estate transaction process and consumer protections.
The paper, titled A Better Way Home: Strengthening Consumer Protection in Real Estate, includes over 30 recommendations over four specific areas that consider housing supply issues, improving consumer protection, evolving the real estate sector and the creation of a regulatory structure. The findings make use of insights from seven focus groups with consumers and real estate professionals, survey data and economic literature.
“BCREA shares consumer and government concerns that current housing market conditions are untenable,” said Darlene K. Hyde, CEO of BCREA in a press release. “Our recommendations include long-term measures to create more housing options for British Columbians, as well as immediate steps to give consumers in the market today more peace of mind. As the voice of BC’s 24,000 Realtors, we want consumers to have full confidence in real estate transactions.”
Mandatory disclosures, document mandates of several recommendations made
In its 57-page paper, BCREA outlined its guidance for the province’s housing market.
The paper’s recommendations include collaborating with real estate stakeholders to establish a process “that balances offer transparency for buyers with privacy concerns,” in multiple offer scenarios, making property disclosure statements mandatory when listing a home, and raising entry qualification standards for new licensees. Recommendations were also made to mandate that all documents related to strata transactions are made available with listings, including strata bylaws, depreciation reports and status of contingency funds.
On the supply side, BCREA has also suggested that, in coordination with the federal government, a permanent National Housing Roundtable should be established to bring together key market stakeholders to address challenges. Recommendations have also been made to implement supply-side measures and calls to action from the Development Approvals Process Review and Canada-BC Expert Panel on the Future of Housing Supply and Affordability.
Concerns raised over “cooling off periods”
BCREA stated that it published its white paper in response to the government’s plans to introduce a mandatory “cooling off period” this spring.
A cooling off period is designed to give buyers an opportunity to reconsider and withdraw their offers. This policy already exists in BC as a seven-day period known as a “right to rescission,” on pre-sale properties.
In November 2021, the BC Ministry of Finance announced that it would introduce legislation in spring 2022 to mandate a cooling off period, which would be applicable to all residential buyers. The province’s real estate regulator, BCFSA, was asked to consult on the appropriate length of a cooling off period, in addition to blind bidding restrictions, plus mandatory contract conditions and disclosures. Some of these policies would be similar to what has been proposed in the federal government’s Home Buyers’ Bill of Rights, BCREA explained.
BCREA said that it is “deeply concerned,” that the decision about cooling off periods was made without in-depth public consultations with the real estate sector and consumers. In its paper, the organization notes that compared to pre-sales where there is an existing cooling off period, the resale market is different “due to the structure of the purchase process.” Survey data that was collected in December 2021 from BC realtors shows that 93 per cent believe a cooling off period will be ineffective, according to BCREA.
“A ‘cooling off period’ is not the answer to alleviating the stresses consumers are currently facing in real estate transactions,” said Hyde. “It won’t stand the test of changing market conditions, regional market differences and doesn’t equally serve buyers and sellers. It also does nothing to address the root of BC’s housing affordability problem; namely, lack of supply.”
Instead of a cooling off period, the report recommended the introduction of a mandatory “pre-offer period,” which would prevent offers being made on a property for a minimum of five business days from when it is first listed. According to BCREA, this would allow for “enhanced market exposure and opportunities for due diligence,” before offers are made, which would help to ensure that buyers aren’t making risky offers too quickly.
“Today’s record housing market is driven not by any single element. It’s the result of a combination of factors: rock-bottom interest rates, major shifts in lifestyle and work habits due to a global pandemic and record low inventories,” said Larry Anderson, president of theFraser Valley Real Estate Board. “This is an issue of complex interdependencies in need of an equally well-formed strategy to resolve.”
