02 May
The current housing market conditions in Canada have resulted in different provinces implementing significant measures to tackle home prices. As such, provinces from B.C to Nova Scotia are announcing new wave of measures aimed at reducing the rampant home price appreciation, however, many in the real estate industry are questioning whether such measures will have any effect or not.
Among the new measures being implemented, there is a cooling off period introduced in B.C which would provide buyers with an unspecified amount of time to be revealed later this year to change their minds after making an offer, leeway to pursue a home inspection or perform other due diligence.
On the other hand, Ontario increased their non-resident speculation tax to 20 percent and expanded its coverage across the province. Similarly, Nova Scotia is also strategizing for similar tax implementation as more demand comes in from outside the province. Elton Ash pointed out the realistic approach that should be adopted by the government towards controlling price appreciation is increasing supply.
Ash also pointed out that a similar measure had been implemented for the pre-construction of condominiums. This allowed buyers a seven-day period to reconsider their decision. However, the measure had no impact on valuation of condos’, highlighted by Ash. Consequently, Ash and other real estate professionals proposed a five-day pre-offer period which would enable buyers to perform property inspections, financing, appraisals, etc. This would remove unneeded stress from both the buyer and the seller.
A real estate specialist at the Vancouver-based Saretsky Group, Steve Saretsky posited that the aim of the government should be to promote transparency in the process of house hunting as this would ease the competitive frenzy which compels buyers to make rash decisions. “I think it has the potential to backfire because you basically create a situation where maybe if everybody has a seven-day rescission period and you can use that to back out, you can basically just go and tie up two, three properties at a time to figure out which one that you want. If you’re looking to create ‘more affordable housing’, I’m not sure this is actually going to help create a more affordable housing market.” Saretsky said.
