policy
06. policy When housing markets heat up, governments get involved. This was the case here in Metro Vancouver and in British Columbia back in 2016-2018, when foreign buyer taxes, vacant home taxes, vacancy and speculation taxes, property transfer tax schedules, and homeowner grant programmes were all introduced, expanded, or altered. With home prices having surged since the beginning of the pandemic, policy interventions have predictably emerged; those most relevant to our market are outlined below, along with some thoughts from Canada’s central bank on inflation and interest rates.
KEEP COOL, MY BABIES
British Columbia’s government is hoping new legislation will help protect potential homebuyers from being pressured into transactions that they aren’t completely comfortable with. The new homebuyer protection period bill, set to be enforced on January 1st, 2023, will provide every buyer of residential real estate with 3 days to fully contemplate their purchase, undertake home inspections, and/or secure financing. As purchase contracts usually include a subject clause—whereby the seller agrees to a purchase price in tandem with granting a period of 3-10 days during which the buyer may walk away from the deal—most transactions will not be affected by the new
rules. Rather, the bill will have a greater impact on deals that occur in multiple offer situations, where buyers compete not just on price to secure a home, but also on other conditions, resulting in subject periods often being waived in such scenarios. As such, we don’t expect this legislation to impact the overall market in terms of prices, supply, or demand (if a potential buyer in a multiple-offer situation abandons a deal, there is likely another buyer willing to complete at similar price). Instead, we applaud the positive impact this will have on a selection of buyers, particularly during more frenetic times in our market.
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