BC government to introduce "cooling-off periods" for resale and new home sales

Single-family detached house in Vancouver. (Shutterstock)

The steep uphill climb in home prices since early Summer 2020 in British Columbia has now led the provincial government to enact its first interventionist measures on the real estate market since the pandemic began.

New legislation will be introduced in Spring 2022 to require cooling-off periods for homes that are resold or newly constructed — just like the cooling-off periods for pre-sales for condominiums.

During this limited period of time, buyers can change their minds and cancel the purchase with no, or diminished, legal consequences.

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“People looking to buy a home need to know they are protected as they make one of the biggest financial decisions of their lives. 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 choices,” said Selina Robinson, BC Minister of Finance, in a statement.

“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 BC Financial Services Authority (BCFSA) has been directed by the provincial government to consult with key stakeholders and experts, and review other potential protection measures for buyers.

This could potentially include examining the blind bidding system and the conditions for waiving offers and other practices. Currently, buyers who are bidding on homes do not have any information on other bids.

Recommended details and structures on the new policies will be laid out by the BCFSA to the provincial government in early 2022.

“Ensuring fair markets and promoting public confidence in BC’s real estate market is a key priority of BCFSA, and we welcome the direction from the minister to lead this valuable consultation work,” said Blair Morrison, CEO of BCFSA and superintendent of real estate.

Within the jurisdiction of the Real Estate Board of Greater Vancouver, overall benchmark home sale prices in October 2021 increased by 14.7% year-over-year to $1.2 million, with detached homes up by 20.5% to $1.85 million, townhomes up by 9.5% to $975,000, and townhomes up by 18.5% to $975,000. Even larger increases were reported by the Fraser Valley Real Estate Board.

The real estate industry blames a shortage of available listings — the lowest number in three years — for pushing up prices, coupled with factors such as pent-up demand from the earlier impacts of COVID-19, and record low interest rates.

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