housing - RankMyAgent - Trusted resource about Buying, Selling and Renting https://rankmyagent.com/realestate RankMyAgent.com is the most-trusted source that brings home buyers, sellers and renters and investors a simplified approach to real estate information Wed, 09 Feb 2022 21:14:31 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.1 https://rankmyagent.com/realestate/wp-content/uploads/2018/02/cropped-rma100x100-32x32.png housing - RankMyAgent - Trusted resource about Buying, Selling and Renting https://rankmyagent.com/realestate 32 32 What do British Columbia’s new real estate regulations mean? https://rankmyagent.com/realestate/what-do-british-columbias-new-real-estate-regulations-mean/ Wed, 09 Feb 2022 21:12:28 +0000 https://rankmyagent.com/realestate/?p=1528 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 […]

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]]> 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 coolingoff@bcfsa.ca. 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

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]]> How Canada’s Next Prime Minister Will Affect the Canadian Property Bubble https://rankmyagent.com/realestate/how-canadas-next-prime-minister-will-affect-the-canadian-property-bubble/ Thu, 16 Sep 2021 15:08:16 +0000 https://rankmyagent.com/realestate/?p=1489 On the eve of Canada’s Federal Election on September 20th, housing continues to be an issue that commands the attention of Canadians: A Nanos Research poll of GTA residents found that 40.8% of respondents found affordable housing to be their biggest issue, while one in five Canadian renters spend over half their income on housing. […]

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]]> On the eve of Canada’s Federal Election on September 20th, housing continues to be an issue that commands the attention of Canadians: A Nanos Research poll of GTA residents found that 40.8% of respondents found affordable housing to be their biggest issue, while one in five Canadian renters spend over half their income on housing. Housing prices over the past few years, especially during the pandemic, have risen exponentially. With housing being such a large concern, how will our next potential prime minister deal with it? Will the Canadian Property Bubble be solved? The three major parties, the New Democratic Party, Liberal Party and Progressive Conservative party, all have varying strategies.

The Conservative Party Platform 2021

The Conservative Party, led by Erin O’Toole has their housing tactics detailed in their platform Canada’s Recovery Plan. The Progressive Conservatives are focused on supply-side solutions to “make housing more affordable” and have a goal of building 1 million homes in the next three years. Some of the key points of their housing strategy are:

  1. Creating tax incentives for Canadians to invest in rental housing by extending the deferral period for the capital gains tax.
  2. Explore converting unneeded office space into housing.
  3. Incentivize corporations and private landowners to donate property to Community Land Trusts
  4. Ban foreign investors not living in or moving to Canada from buying homes for a two year period, followed by a review period
  5. Encourage foreign investment in purpose built rental housing
  6. Mortgage reforms, such as a new market for 7-10 year mortgage, change the mortgage stress test and increase eligibility for mortgage insurance.

The Liberal Platform 2021

The Liberal party, led by current Prime Minister Justin Trudeau, addresses the 2021 housing market and real estate bubble beyond in their platform, Forward. For Everyone. The Liberal housing plan also looks at supply-side solutions, with more of an emphasis on renters and taxation to affect the prices in the housing market. The Liberals plan on building, preserving, and revitalizing a total of 1.4 million homes by 2025-26 (including the homes they have built-in previous administrations) Some of the Liberal housing priorities are:

  1. Implementing their previously announced national tax on vacant property owned by non-resident, non-Canadians.
  2. Creating a rent-to-own program to benefit renters and landlords, and committing $1 billion to this program
  3. Creating a TFSA like New Tax-Free First Home Savings Account for Canadians under 40
  4. Introducing multigeneration Home Renovation tax credit, where multigeneration families can claim a tax credit up to $50 000 for renovation and construction costs.
  5. Invest $4 billion into a new Housing Accelerator fund to grow annual housing supply in Canada’s biggest cities
  6. Establish an “anti-flipping tax” to curve house speculation on homes held under 12 months

The NDP Platform 2021

For Canada’s New Democratic Party, led by Jagmeet Singh, their housing plan is detailed in their platform Ready for Better.The NDP also focuses on supply-side solutions but is the most renter-focused out of the three main parties. The NDP is also more focused on social and non-profit housing. Their main methods to combat Canada’s housing crisis are:

  1. Build 500,000 units of affordable housing in 10 years, with 50% of those houses being built in the next five years.
  2. Doubling the Home Buyer’s Tax credit to help with closing costs.
  3. Bring back 30-year terms for CHMC insured mortgages.
  4. Provide resources to facilitate co-housing through methods such as removing barriers to financing
  5. Use a 20% Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents
  6. Increase available rent relief that will be available immediately to families having trouble affording their rent

While real estate is a hot topic, when examining the numbers it is apparent that housing has become a cross-partisan issue through how exceptional our market is. People know that prices are high in large urban areas like Vancouver and Toronto, but smaller cities such as Brantford, Ontario have had prices rise by over 40%. Canada, for a couple of decades now, has always had expensive real estate and the Canadian property bubble has been of continuous interest. In 2011, Canada had Vancouver, Kelowna, Burnaby and Toronto in the top 71 most expensive cities to buy a four-bedroom, two-bathroom home. The fact is that Canada’s real estate market has grown longer than any G7 country for 34 years and the current result is Canada having the second “bubbliest” market in the world, according to Bloomberg Economics.

With stats like that, the good news is that there is some degree of consensus between the three major parties on what to do. Besides the focus on increasing house supply through building houses, the Conservatives, NDP and Liberals see our tax system as a method to lower housing costs. Conservatives are more focused on using tax incentives to encourage those with the means to invest in rental housing, whereas the Liberals use the tax system as a way to increase first-time homeownership (through their proposed TFSA-like account) and to disincentivize behaviour such as speculation. The NDP are more aligned with the Liberals in how they use the tax system, be it through the 20% foreign homeownership tax to disincentivize behaviour, or using an increased tax credit to encourage home-buying.

Whatever Canadians find to be the best solution to housing on September 20th, their hopes are that the chosen party has a sufficient solution. It should be kept in mind though that as there are some philosophical similarities between the different housing platforms of each party, Canada’s next Prime Minister will have to continue the cross-partisan alignment into governance. Policy that impacts housing, such as zoning, is also handled by the Provincial and Municipal level, and all three parties have Premiers across Canada. Hopefully, market forecasting for the future housing market past September 20th will be optimistic.

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