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BC government enacts mandatory three-day cooling-off period on home sales

As of the very start of 2023, home sales across British Columbia will be subject to a three-day, cooling-off period as a measure to protect homebuyers.

The provincial government first announced it will add a mandatory cooling-off period to its tool to help address housing affordability, but the precise details and timeline for the policy were up in the air until today.

When it goes into effect on January 1, there will be cancellation fee of 0.25% of the purchase price — $250 for every $100,000 in value — for those who choose to back out of a deal. This means that, for example, if a homebuyer exercises the right to “rescission” on a $1 million home, they would be required to pay $2,500 to the homeowner.

Such a policy is the first of its kind in Canada to offer better consumer protection in the real estate market. This gives prospective homebuyers more time to perform due diligence, such as securing financing or arranging home inspections.

“Too many people have been faced with giving up an inspection in order to buy a home,” said Selina Robinson, minister of finance. “This is a major step toward providing homebuyers with the peace of mind they deserve while protecting the interests of people selling their homes — for today’s market and in the future.”

Upon implementation, the provincial government will study the policy and its potential effects. This cooling-off period was established after widespread consultation with 140 industry stakeholders and experts.

“Buying and selling a home are the most significant financial transactions in most people’s lives,” said Blair Morrison, the CEO of BC Financial Services Authority.

“We want to promote confidence in real estate transactions and our advice is aligned with that outcome.”

However, the BC Real Estate Association has been skeptical over the provincial government’s claims that this will be an effective policy. For example, the cooling-off period could encourage wealthy buyers and investors to submit offers on multiple parties, thereby increasing demand and a potential bidding war. In Spring 2021, there were nearly three times the number of homebuyers in the market than there were available properties, which led to highly competitive market conditions.

The new policy builds on the existing seven-day, cooling-off period policy for pre-sale condominiums, where a homebuyer can walk away without a penalty.
Jul 21 2022, 12:10 pm

History in the Making


Then & Now

Silver Valley is located on the north side of the Alouette River and is a gateway to popular recreation areas for residents and visitors alike and is rich with stunning views and access to fantastic trail networks. 

The forested hillsides of this area contain an extensive trail network with spectacular views. The creeks and rivers that flow through Silver Valley provide some of the richest salmon habitat in the Lower Mainland, supporting populations of Chum, Coho and Pink Salmon as well Cutthroat and Steelhead Trout. 

Two important, distinct vegetation communities are found within the Silver Valley area. The marshlands to the west are part of the Blaney Creek watershed and now represent part of the Greater Vancouver Regional District’s park system. The rock barrens are long-term natural clearings, with the thin soils located here, they are incapable of supporting forest cover. 

Silver Valley is a growing residential area popular with equestrians so it is very common to see people riding horses here in Maple Ridge. 

The UBC Malcolm Knapp Research Forest is home to the Loon Lake Lodge and Retreat Centre and contains black bear, cougar and black-tailed deer populations. As many as 26 species of birds have also been identified and the marshland to the west is an important wintering and breeding habitat for waterfowl.

The Bank of Canada today increased its target for the overnight rate to 2½%, with the Bank Rate at 2¾% and the deposit rate at 2½%. The Bank is also continuing its policy of quantitative tightening (QT).

Inflation in Canada is higher and more persistent than the Bank expected in its April Monetary Policy Report (MPR), and will likely remain around 8% in the next few months. While global factors such as the war in Ukraine and ongoing supply disruptions have been the biggest drivers, domestic price pressures from excess demand are becoming more prominent. More than half of the components that make up the CPI are now rising by more than 5%. With this broadening of price pressures, the Bank’s core measures of inflation have moved up to between 3.9% and 5.4%. Also, surveys indicate more consumers and businesses are expecting inflation to be higher for longer, raising the risk that elevated inflation becomes entrenched in price- and wage-setting. If that occurs, the economic cost of restoring price stability will be higher.

Global inflation is higher, reflecting the impact of the Russian invasion of Ukraine, ongoing supply constraints, and strong demand. Many central banks are tightening monetary policy to combat inflation, and the resulting tighter financial conditions are moderating economic growth. In the United States, high inflation and rising interest rates are contributing to a slowdown in domestic demand. China’s economy is being held back by waves of restrictive measures to contain COVID-19 outbreaks. Oil prices remain high and volatile. The Bank now expects global economic growth to slow to about 3½% this year and 2% in 2023 before strengthening to 3% in 2024.

Further excess demand has built up in the Canadian economy. Labour markets are tight with a record low unemployment rate, widespread labour shortages, and increasing wage pressures. With strong demand, businesses are passing on higher input and labour costs by raising prices. Consumption is robust, led by a rebound in spending on hard-to-distance services. Business investment is solid and exports are being boosted by elevated commodity prices. The Bank estimates that GDP grew by about 4% in the second quarter. Growth is expected to slow to about 2% in the third quarter as consumption growth moderates and housing market activity pulls back following unsustainable strength during the pandemic.

The Bank expects Canada’s economy to grow by 3½% in 2022, 1¾% in 2023, and 2½% in 2024. Economic activity will slow as global growth moderates and tighter monetary policy works its way through the economy. This, combined with the resolution of supply disruptions, will bring demand and supply back into balance and alleviate inflationary pressures. Global energy prices are also projected to decline. The July outlook has inflation starting to come back down later this year, easing to about 3% by the end of next year and returning to the 2% target by the end of 2024.

With the economy clearly in excess demand, inflation high and broadening, and more businesses and consumers expecting high inflation to persist for longer, the Governing Council decided to front-load the path to higher interest rates by raising the policy rate by 100 basis points today. The Governing Council continues to judge that interest rates will need to rise further, and the pace of increases will be guided by the Bank’s ongoing assessment of the economy and inflation. Quantitative tightening continues and is complementing increases in the policy interest rate. The Governing Council is resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is September 7, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on October 26, 2022.

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