B.C. Government Plans “Cooling Off” Period for Home Sales
The Government of British Columbia plans to inject some sober second thought into the province’s hot real estate market by introducing a “cooling-off” period for home sales in the spring.
The proposal would allow buyers a period of time where they could back out of their home purchase with no or diminished legal consequences, and would apply to both resale and newly built homes.
“People looking to buy a home need to know they are protected as they make one of the biggest financial decisions of their lives,” said B.C.’s Minister of Finance, Selina Robinson, in a release. “With this step, we’re moving ahead to protect people and their interests in the real estate market by bringing in a cooling off period for homebuyers and looking at additional measures to ensure effective safeguards are in place.”
The government has tasked the B.C. Financial Services Authority (BCFSA), which on August 1, 2021, became the single regulator for all financial services in the province, with consulting stakeholders and experts.
Part of that consultation will include looking at the blind bidding system, the practice of waiving conditions in home purchase offers, and any other practices that may pose risks to consumers, the government said.
“Especially in periods of heightened activity in the housing market, it’s crucial that we have effective measures in place so that people have the peace of mind that they’ve made the right choice,” Robinson said.
Seven-day cooling-off periods are already in place for pre-construction sales of multi-development units in the province.
Announcement Comes as B.C.’s Housing Market Remains Hot
The announcement came just days after the Real Estate Board of Greater Vancouver (REBGV) released October housing data showing continued house price gains in the province’s metro areas.
The average home price in Vancouver now stands at $1,199,400, a 14.7% increase from last year and up slightly from last month, according to MLS Home Price Index for all property types.
The B.C. government noted that the province has experienced “significant volatility” this year largely as a result of low interest rates and pent-up demand for additional living space in the face of the pandemic.
At least one stakeholder said it was “premature” to introduce legislation without first consulting stakeholders.
“[The association] supports thoughtfully designed, properly vetted and evidence-based policy that protects consumers and enhances professionalism and transparency within the real estate sector,” Darlene Hyde, chief executive officer of the B.C. Real Estate Association, told the Globe and Mail.
BCFSA’s consultations are expected to start in the coming weeks.
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