A federal ban on foreigners buying residential real estate is set to go into effect in January.

But local real estate agents and pundits say they’re still in the dark about exactly how the ban will work and what it will mean to the real estate market on the North Shore.

Since last spring, when Ottawa first announced its intention to ban foreign buyers, “it’s been under the radar,” said Jason Soprovich, a West Vancouver real estate agent who specializes in luxury homes.

“We’ve been told that it’s coming into effect, and that it’s going to affect personal purchases of international buyers across the entire country, and that there will be a moratorium for two years, and that it will affect corporations being able to purchase as well.”

What’s less clear is what the impact will be, he said.

Impact of foreign buying ban unclear

The federal government introduced the new rules among efforts to dampen housing prices.

But Andy Yan, director of SFU’s city program, said that move has come about a decade too late. Between 2011 and 2016, foreigner buyers played an outsize role in some real estate markets, notably including West Vancouver, which became popular with affluent purchasers from China.

At that time, loose lending rules governing foreigners meant it was often easier to get a loan as a foreign student with assets than it was as a Canadian seeking a mortgage, said Yan.

The result was many foreigners were happy to use local real estate as an investment, he said.

Resulting rising prices are “what happens when residential property becomes a global commodity,” said Yan.

Going back to 2016, foreign buyers made up 24 per cent of West Vancouver real estate purchasers in the weeks leading up to the introduction of the provincial foreign buyers tax.

But once that tax was put in place in 2016, foreigners have made up a much smaller percentage of purchasers, said Soprovich.

During pandemic number of foreign buyers fell

As COVID-19 closed borders in 2020 and 2021, foreigners largely disappeared from real estate sales, he said. The real estate boom of last year was fuelled entirely by domestic buyers, said Soprovich.

Yan said foreigners haven’t been dissuaded entirely from buying local real estate. In fact, he said he wouldn’t be surprised to see a spike before the ban officially goes into place.

He added the two-year moratorium is a temporary measure and may be intended more for political appearances than to accomplish policy goals.

About nine per cent of West Van homes foreign owned

According to figures from the Ministry of Finance, about nine per cent of homes in West Vancouver have some kind of foreign ownership. In the District of North Vancouver, that percentage was lower – at about three per cent. In the City of North Vancouver, foreigners account for about five per cent of residential property owners.

Foreigners also pay about 60 per cent of the speculation and vacancy tax.

In West Vancouver, the amount paid – $6.58 million – is the third highest in the province.

Selling price of typical home has fallen 12% since last year and is down nearly $200K since February

The slowdown underway in Canada's housing market continued last month, new figures from the Canadian Real Estate Association showed Thursday, with the average selling price falling to just over $630,000, and the number of home sales off by almost 40 per cent.

The group, which represents more than 100,000 realtors across the country, said that the number of homes sold in November fell by 38.9 per cent from the same month a year ago. November isn't typically a busy month for home sales, as cooler weather often pushes buyers to the sidelines this time of year. 

But the housing market was even chillier than usual this November, with a little over 33,000 homes being sold during the month. That's down about 10 per cent from the typical November sales pace, and down from almost 50,000 in the same month in 2021.

The average selling price of a home that went on CREA's Multiple Listings Service was $632,802. That's 12 per cent below what it was a year ago, and down from 22 per cent from the peak hit in February of this year.

That was before the Bank of Canada started its aggressive campaign of rate hikes, which has taken the wind out of the market's sails by making it much more expensive to borrow money.

CREA says the average selling price can be a misleading picture of the market, since it is easily skewed by sales in big expensive cities like Toronto and Vancouver, so it trumpets another number, the House Price Index, as a better gauge of the market.

The HPI fell by 1.4 per cent during the month to $744,000, and is now down by more than 11 per cent from its February peak, after having fallen for nine months in a row.

"There were no big surprises in the November housing numbers, with the data showing the same trends of lower sales and moderating prices we've been seeing for a number of months now," said CREA chair Jill Oudil.

That price moderation is welcome news for recent buyers like Yildiz Marcelin, who purchased a townhouse in Toronto.

She and her family have owned a condominium in the city since 2016, but with daughters growing up fast, they have been looking for more space for years.

Economist Rishi Sondhi with TD Bank says the numbers released Thursday paint a clear picture of a market that is slowing down, and is likely to continue to do so.

"Demand continues to decline under the weight of rising interest rates," he said, noting that the central bank has already raised its interest rate once since the time period covered in today's data release. "We think they'll move their rate slightly higher early next year, [but] all of this points to continued sales declines in the coming months."

The Home Buyer Rescission Period (HBRP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide on January 3, 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.  

New or revised questions will be positioned at the top of this page.  

What is the Home Buyer Rescission Period (HBRP)? 

The HBRP, commonly known as a "rescission period," gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate an unconditional contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.  

What properties will be subject to the HBRP? 

The policy will apply to the following types of structures: 

• detached homes,
• semi-detached homes,
• townhouses,
• apartments in a duplex or other multi-unit dwellings,
• residential strata lots,
• manufactured homes that are affixed to land, and
• cooperative interests that include a right of use or occupation of a dwelling.

How much is the rescission fee?

Buyers who exercise their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller. 

To help you calculate the rescission fee, BCREA will launch two HBRP calculators, which will be available on BCREA Access.

What is meant by “three business days?”

The HBRP provides that the buyer must exercise their rescission right within three clear business days. Business days do not include Saturdays, Sundays or holidays. Holidays are defined within the Interpretation Act to include:

• Christmas Day
• December 26
• Family Day
• Good Friday
• Easter Monday
• Victoria Day
• Canada Day
• British Columbia Day
• Labour Day
• National Truth and Reconciliation Day
• Thanksgiving
• Remembrance Day, and
• New Year’s Day

In addition, a day set by the federal or provincial government, such as a day of mourning or celebration, is considered a public holiday.

What are REALTORS®’ requirements to inform their clients?

All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of, or presenting an offer to a client, containing all of the following notices: 

• that the HBRP cannot be waived,
• the rescission period time length,
• the dollar amount of the rescission fee,
• the deposit handling, and
• exemptions

Are brokerages required to retain a copy of a rescission notice?

Yes, brokerages are required to retain copies of notices of rescission that are prepared by or on behalf of a brokerage and served on a seller. Brokerages are also required to retain copies of rescission notices that are received by the brokerage.

How are sellers supposed to receive rescission notice?

Buyers must serve rescission notice to the seller through registered mail, fax, an email with a read receipt or personal service. Rescission notices must contain:

• the address, PID or description of the property,
• the names and signatures of the buyer(s),
• the names of the seller(s), and
• a date of notice.

How does a HBRP impact other subjects in my contract?

Other subjects are unaffected by the HBRP.

What about For Sale by Owner (FSBO) properties?

The HBRP applies to all residential real estate sales, which includes private sales and FSBO properties.

Can the HBRP be waived?

No, the HBRP cannot be waived.

Are there any exemptions?

There are narrow exemptions, including:

• sales of residential real property located on leased land,
• sales of leasehold interest in residential real estate,
• sales at auction,
• sales by way of an Assignment of Contract,
• pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and
• sales under a court order of supervision of a court.

Will the rescission fee be taken from the deposit?

If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.  

Who will receive the rescission fee?

The rescission fee amount is provided to the seller

Source: British Columbia Real Estate Association

If you signed a lease in December, consider yourself lucky. That’s because, for the first time since July, Vancouver saw the average cost of rent dip – just slightly.

At the start of COVID-19 pandemic, the average cost of rent in Vancouver dipped. Since then, it’s not just rebounded but gone well beyond pre-COVID-19 prices.

Now, the average cost of an unfurnished, one-bedroom unit for rent in Metro Vancouver is $2,227 per month, according to liv.rent.

Average rental prices in Metro Vancouver – last six months

The December dip is likely due to a few factors. Rental expert Paula Azevedo told Daily Hive that rental prices “seem to be stabilizing and coming to a healthier average after multiple months of an ongoing upward trajectory.”

“With colder weather starting in November, renters seem to be avoiding big moves, which brings the demand to a lower rate while supply remains the same,” said Azevedo.

“There were also a higher number of homeowners shifting short-term stays to long-term due to the lack of visitors, thus, affecting the averages.”

Cost of rent in Metro Vancouver municipalities

Even though across the board, Metro Vancouver rent went down, there were two regions where it went up slightly, in Vancouver (+0.71%) and in Langley (+2.36%.)

Vancouver continues to be Canada’s most expensive city for renters, with North Vancouver a close second.

Does this December dip in rent prices make you more hopeful?

Source: dailyhive.com

A new regulation banning stratas from the ability to restrict homeowners from renting out their residential units is now in effect.

Under the new leadership of BC Premier David Eby, the new legislation was proposed on Monday, November 21, and it was subsequently swiftly approved by the BC NDP majority.

The change in provincial legislation then went into effect on Thursday, November 24, which automatically and immediately overrides any strata bylaw that restricts rentals in their building

This policy shift is part of the provincial government’s new multi-faceted approach to tackle housing affordability.

Based on the province’s data through the Speculation and Vacancy Tax, it is anticipated about 2,300 empty condominiums across BC cannot be rented out due to strata rules that prevent property owners from renting out their units.

It is also believed that the legislation change will open up the possibility for some condominium owners to rent out a room in their unit if they were given the opportunity to do so.

However, stratas can still ban the operation of short-term rentals — such as Airbnb — in their buildings. Existing provincial legislation permits stratas to enforce fines of up to $1,000 per day for short-term rentals that are not permitted under strata bylaws.

As of last week, only strata bylaws limiting residents to age 55 and over are allowed, with any strata age-restriction bylaw restricting ages to under 55 now invalid. Stratas can have bylaws that require one or more persons residing in the unit to have reached an age that is not less than 55 years. The provincial legislation allows any live-in caregiver, including caregivers under the age of 55.

Source : https://dailyhive.com/