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Real estate in conflict with the Minister of Finance on how to tame the housing market

The BC Real Estate Association opposes the state’s plan to allow homebuyers to cancel their sale within a seven-day “cooling period.”

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British Columbia’s real estate industry and state finance minister Selina Robinson are at odds over how to tame the fierce housing market.

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Last November, the state announced plans to implement a “cooling-off period.” During this period, the buyer has seven days to change his mind and cancel the sale after agreeing to purchase the property.

On Monday, the BC Real Estate Association, which represents 24,00 realtors, opposed the plan.

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“The’cooling-off period’is not the answer to reducing the stress consumers are currently facing in real estate transactions,” said Darleen Hyde, CEO of BCREA, with similar cooling in other global jurisdictions. He quoted an analysis conducted by the group on the off period. “At first glance, it’s fascinating, but in a market like us that is characterized by low supply, we believe that the cooling-off period causes more problems than it solves.”

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Instead, the association proposes a “pre-offer period”. During this period, after the property is listed, the buyer will investigate for 5 days to get information about the property before the offer is accepted.

If you are purchasing geological assets, we suggest that you make documents such as geological rules, depreciation reports, contingency information, and copies of insurance documents available when they appear on the list.

This is all part of a 57-page white paper and is “unacceptable” due to bid wars, supply shortages and soaring prices, and the 30 recommendations the industry has to deal with the current hot housing market situation. Matters are included.

The association said the British Columbia announcement to implement a “cooling-off period” in the fall of 2021 was made without extensive consultation.

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Hyde estimates that the state is on the list of 25,000 less than what is needed for a balanced market, and that supply shortages could be exacerbated by BC’s forecast of 70,000 to 80,000 immigrants this year. rice field.

On Monday, Robinson replied that the Real Estate Association as a Commission-led industry has a vested interest in the hot market, but the government’s job is to ensure that people are protected. am.

“I know a lot of views on this, including the association’s proposal for a pre-offer period. The pre-offer period is unlikely to address risk concerns to buyers, It can foster multiple offer situations and have an unknown impact on home prices. “

Larry Anderson, president of the Fraser Valley Real Estate Commission, said the record housing market has solid interest rates, major lifestyle and work habit changes due to COVID-19, and very low inventory.

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Alex Goseltine, Executive Officer of British Columbia’s Northern Real Estate Commission, warned against a “universal” response, and a “cooling-off period” response appears to be based on current market conditions only in certain areas of the state. Said.

One scholar argued that instead of calming the market, the so-called flexibility provided by the proposed “cooling-off period” could make the market even easier to guess.

Andrey Pavlov, who studies real estate finance at Simon Fraser University’s BD Business School, likened it to being able to buy airline tickets and book hotels. It will be much more expensive.

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He said the government-sponsored cooling-off period would allow buyers to buy homes as speculative financial assets, modify prices, and decide whether to actually buy in a few days without paying a percentage. rice field. Its flexibility. He said this situation would benefit experienced buyers with deep pockets who would find incentives by making many deals in ways that first-time homebuyers couldn’t easily do. I did.

“We’ve also heard the views of mortgage brokers, home inspectors, and the experience of future home buyers about taking unreasonable risks in finding homes in overheated markets,” Robinson said. “Currently, state real estate regulators are discussing ways to introduce a potentially effective cooling period in British Columbia.”

— Use Canadian Press files

jlee-young@postmedia.com

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Real estate in conflict with the Minister of Finance on how to tame the housing market

Source link Real estate in conflict with the Minister of Finance on how to tame the housing market

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