Here's what an association recommends to address B.C.'s real estate challenges

Real estate cooling-off period a problem: critics New criticism of B.C.'s plan to cool down the housing market: Experts say other measures are desperately needed instead.

A B.C. association is calling for what it says are sweeping changes to address challenges in the province's real estate market, as it pushes back against the notion of a "cooling-off period" proposed by the province.

On Monday, the B.C. Real Estate Association released 30 recommendations it says will help the overall housing market and supply issues as well as the transaction process and consumer protection.

"BCREA shares consumer and government concerns that current housing market conditions are untenable," said CEO Darlene Hyde in a news 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."

Some of those recommendations include introducing a "pre-offer period," requiring at least five days from when a property is first listed to give buyers time to research a property. During that time, offers won't be permitted. That recommendation, says the BCREA, is better than a cooling-off period where buyers could back out of a deal within a specified timeframe.

"We believe that a cooling-off period will cause more problems than it solves," said Hyde at a news conference Monday. He added that an increase in offers would likely result and, "Our economics team estimates that a 10 per cent increase in bids would increase list prices by two to three per cent. "

The BCREA said the decision to introduce the legislation, announced in November, was made without adequate consultation and could lead to unintended negative consequences, claiming it's been "ineffectual at best" in other jurisdictions.

"A 'cooling-off period' is not the answer to alleviating the stresses consumers are currently facing in real estate transactions," Hyde said.

"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 B.C.’s housing affordability problem; namely, lack of supply."

The province directed the Financial Services Authority, which acts as a regulator, to also look into blind bidding and no-subject contracts. The report is due early this spring.

Finance Minister Selina Robinson said she hadn't read the full report, but pointed out BCREA's "vested interest in house prices," noting the FSA would direct policy. The province is currently raking in billions of dollars in property transfer tax revenue as the industry continues to be a big part of the economy.

The BCREA also recommends requiring that strata documents like bylaws, depreciation reports and contingency funds be made available in the property's listing. It also recommends property disclosure statements be made available when a property is listed.

In recent months, B.C. and the Lower Mainland in particular, has seen an especially tight real estate market due in part to low supply.

"Our listing inventory on MLS is less than half of what would be optimal to begin the year. As a result, hopeful homebuyers have limited choice in the market today," said Real Estate Board of Greater Vancouver economist Keith Stewart earlier this month.

"This trend is causing fierce competition for a scarce number of homes for sale, which, in turn, increases prices."

In its report, the BCREA said prospective buyers outnumbered sellers three-to-one in March 2021, which was a peak in market activity. According to the association, that led to prices rising 30 per cent in some areas.

"The underlying problem is one of supply and there have been decades of under-building," said Hyde.

The president of the Fraser Valley Real Estate Board said there are several elements at play that resulted in the market reaching this point.

“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 in a statement responding to the BCREA's report.

"This is an issue of complex interdependencies in need of an equally well-formed strategy to resolve. If we are to achieve a long-term solution, we require a coordinated, collaborative approach, one that includes all stakeholders – regulators, Realtors, builders, and local governments – as equal partners."

Read the BCREA's full list of recommendations below.