It’s official: The BC government has announced a date for its mandatory 3-day cool-down period for homebuyers: January 1, 2023.
The discussions with homebuyers and real estate organizations had been ongoing for the last several months. The goal was to reduce the pressure on homebuyers to buy as soon as possible, and instead give them time to perform due diligence like securing financing or completing a home inspection.
“Homebuyers in B.C. will soon become the first in the country to have legal protections against taking on too much risk in the housing market,” said B.C.’s minister of finance Selina Robinson.
Protecting buyers and sellers
Elaine Spilos, a homebuyer who spoke at the news conference announcing the cool-off period, contacted the finance minister after she was assured that the “exceptional” home they just bought had already been inspected and built to code.
However, she was hit with reality three weeks later when the sewer line backed up, and then a similar incident occurred nine months later. A proper home inspection would have discovered the problem and saved her and her husband thousands in repairs.
The protections are extending to the sellers as well. Buyers will be charged a 0.25% cancellation fee if they don’t go through with the deal after the cool-off period. So, for example, if a buyer backs out of purchasing a $1,000,000 home, they’d pay a cancellation fee of $2500.
However, the biggest question being asked is this:
Is the cool-off period too late to make any sort of impact?
In the sizzling hot market we saw this spring, a three-day period to get everything in order would have been welcomed, according to the BC Real Estate Association (BCREA). But with the market evening out right now, it’s not going to have the same impact buyers are currently facing.
The BC Financial Service Authority had sent the provincial government a report with 32 recommendations for protecting both buyers and sellers, including a five-day pre-offer period that would have given buyers time to compare homes and exposed properties to a wider market, rather than buyers and sellers reacting too quickly. The province is only implementing a few of these recommendations.
Cool-off or not, BC needs more housing
The real answer to the cost of housing seems to be to have more housing available. Kelowna is still in the low-inventory, high-demand place it’s been since the spring, though the frantic rush to get a deal rammed through seems to have slowed down.
Average prices for homes in Western Canada
The Re/Max Canadian Housing Affordability Index was recently released and it ranks the affordability of cities based on the proportion of income spent on a mortgage. Right now, the average price for a single-family home in Kelowna is approximately $943,000.
Compare that to the most affordable cities in Western Canada. In Red Deer, Alberta, the average home price is $357,000, Regina’s is $324,000, and in Brandon, MB, the price is $310,000. On the flip side, Victoria and Vancouver have the highest average home price at $1 million and $1.3 million, respectively.
More needs to be done
The cooling-off period is the first of its kind in Canada, and while it’s a decent start, the BCREA believes more could be done. BCREA CEO Trevor Koot is disappointed the province announced only one measure to protect homebuyers. He said the industry will be monitoring how effective the three-day cooling period is after it comes into effect in January.
The Mayne Brothers, your local Kelowna realtors
If you’re looking into stepping into the Kelowna real estate market, you’ll want a realtor that can navigate the waters for you. The Mayne Brothers have a combined 40 years’ experience in the Okanagan and can help you on your home buying journey.
To find out more, call 1-800-430-5030.