BCREA 2021 Second Quarter Housing Forecast: Provincial Housing Market on a Record-Setting Pace

 

To view the BCREA Housing Forecast PDF, click here.

Vancouver, BC – May 5, 2021. The British Columbia Real Estate Association (BCREA) released its 2021 Second Quarter Housing Forecast today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to rise 33.6 per cent to 125,600 units this year, after recording 94,013 sales in 2020. In 2022, MLS® residential sales are forecast to pull back 20.3 per cent to 100,150 units.

“Home sales across the province are on pace to shatter previous records,” said Brendon Ogmundson, BCREA Chief Economist. “However, there are early signs that markets are calming from the frenetic pace of recent months and could balance out over the second half of this year.”

Many markets, especially those outside of major metro areas, remain very low on supply. As a result, market conditions are extraordinarily tight and prices are rising rapidly. We are forecasting a 14.3 per cent rise in the MLS® average price this year, followed by a further 3.1 per cent in 2022.

For the complete news release, including detailed statistics, click here.

2021 Changes to Your Anti-Money Laundering Obligations

 
     
On June 1, 2021, big changes are coming to real estate practice and your anti-money laundering obligations. The Financial Transactions & Reports Analysis Centre of Canada (FINTRAC) has introduced regulatory amendments that will come into effect on June 1 and create new or change existing obligations for all reporting entities (REs), including real estate brokerages. BCREA will support brokerages and REALTORS® through these changes and ensure you have the tools and resources you need to continue meeting your FINTRAC obligations.

Additionally, the Land Owner Transparency Registry (LOTR) becomes publicly searchable on April 30, 2021, and guidance from the Real Estate Council of BC (RECBC) on how to use LOTR in real estate practice is coming soon. BCREA will support brokerages and Realtors in adapting their practice in accordance to the RECBC guidance once it’s available. In the meantime, Realtors can prepare by familiarizing themselves with LOTR and the new public search tool. Watch this page for more updates on the RECBC guidance and using LOTR when working with buyers and sellers.

BCREA has created this landing page so that Realtors and brokers have access to the resources and information they need to implement the June 1 FINTRAC changes and use LOTR in their real estate practice.   

FINTRAC Changes: What to Expect

The June 1 FINTRAC amendments that will create new or change existing obligations for all REs, including real estate brokerages, include:

While BCREA has been working tirelessly to determine how these changes will impact real estate practice, the real estate sector is still awaiting additional sector-specific guidance from FINTRAC. BCREA will add this guidance, as well as resources from the Canadian Real Estate Association, to this landing page as soon as they are available and develop additional guidance as needed.

BCREA will also host a Community of Practice session for managing brokers on the coming FINTRAC changes on May 19 (register here) and a webinar for all Realtors on June 2. We will create videos, podcast episodes and blog posts; update and offer our Mastering Compliance anti-money laundering training program again this fall; and host our first-ever anti-money laundering symposium later this year. Watch this page for updates on these events and resources!

LOTR Search

As we work with RECBC to understand how the LOTR public search tool can be used in real estate practice, we will prepare Realtors to use the tool by sharing information and resources from the Land Survey Titles Authority (LTSA), who is responsible for developing and operating LOTR. We will also host a Community of Practice session on April 21 on using the LOTR public search function (register here).

If you’re not familiar with LOTR or the Land Owner Transparency Act (LOTA), we have also created a number of resources on LOTR, found in the resources section below.

Resources

FINTRAC Changes

LOTR Search

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BCREA Supports Housing Funding for Middle-Income Families, Encourages Additional Supply-Side Action

Vancouver, BC – April 19, 2021. The British Columbia Real Estate Association (BCREA) welcomes the province’s recent announcement that $2 billion in development financing will be committed to the HousingHub program to help create affordable housing choices for middle-income families.

“With home prices having risen over the last decade and that trend continuing, we know securing housing – whether through ownership or rental – is not easy,” says BCREA CEO Darlene Hyde. “This type of action, which focuses on adding supply to meet overwhelming housing demand, is a meaningful step in the right direction.  But of course, there’s more work to be done.”

Housing prices in BC have risen 52 percent since 2012, and these costs are often passed on to home buyers and tenants. While there are many factors – like interest rates – which affect housing prices, one of the biggest factors is the limited housing supply relative to the demand.

BCREA encourages the province to continue to focus on supply-side measures in order to create more housing options for the people of BC. These measures might include, but are not limited to, reducing public hearing times in the development approvals process, as well as leveraging transportation funding to encourage gentle densification.

“There isn’t a silver bullet when it comes to housing affordability,” adds Hyde. “But there is a clear way forward and that is evidence-based policy focused on creating more housing options for British Columbians. We are pleased to see the government’s action with the HousingHub commitment and we look forward to working with the government on future action.”

Water Sustainability Act – You Have Questions, We Have Answers

At BCREA, we often receive questions from REALTORS® and consumers related to standard forms.  We’ve received several great questions about groundwater licensing and the Water Sustainability Act (WSA) as it pertains to the Property Disclosure Statement. Below, you can find three frequently asked questions on the topic, with answers provided by a member of the BC Government’s Living Water Smart team.

1. Where there is a well on a vacant property that is not in use yet, is it considered a domestic water supply and does it require authorization?

“To help answer your question, I’ll provide a bit of background on the scope of the legislation and the authorization of water use:

  • The Water Sustainability Act (WSA) states that the province is responsible for all water in streams and all groundwater in BC.
  • Water use purposes are described in Section 2 of the WSA. I’ve included the full definition in the legislation of “domestic purpose,” which means the use of water for household purposes by the occupants of, subject to the regulations, one or more private dwellings, other than multi-family apartment buildings, including, without limitation, hotels and strata titled or cooperative buildings, located on a single parcel, including, without limitation, the following uses:
  • drinking water, food preparation and sanitation;
  • fire prevention
  • providing water to animals or poultry kept
    • (i) for household use, or
    • (ii) as pets;
  • irrigation of a garden not exceeding 1000 m2 that is adjoining and occupied with a dwelling.
  • A person can divert/use/store vested water only if they have established a right (usually a water licence) or if the diversion or use is authorized under the statute or the regulations.
  • WSA Section 6 (4) establishes that a person may divert and beneficially use groundwater from an aquifer for domestic purpose without holding an authorization. In other words, domestic use of groundwater is exempt from licensing requirements.
  • An authorization is not needed if a person is not diverting or using water.
  • A person who holds an authorization is expected to make “beneficial use” of the water. Rights may be canceled if the licensee fails to make beneficial use of the water for 3 successive years.

Circling back to your original question, in the case of an unused domestic well, a water authorization is not required. If the landowner begins using water, and if that use is consistent with the definition of “domestic purpose” then they are exempt from the requirement to obtain a licence. If they use water for a purpose that is inconsistent with “domestic purpose” then they need to acquire an authorization.”

2. Does the size of the property determine if authorization for a water license is required?

“The size of the lot is not directly relevant to authorization requirements. As an example, if the lot size is 5000 m2 but they irrigate less than 1000m2, then their use would remain consistent with the domestic use purpose under the WSA. If, however, they wanted to irrigate an area exceeding 1000m2, then they would need an authorization (likely either for “irrigation purpose” or “industrial purpose” depending on what they are growing).”

3. What happens when a well is dug but is not used right away (e.g., on a vacant lot)?

“Unused wells that are not properly deactivated or decommissioned pose a threat to an aquifer’s water quality. A well not in use for five years must be deactivated, or decommissioned. If a well has been deactivated for five years, or not in use for ten years, and there is no intent to use the well in the future, the well must be decommissioned. For more information on the requirements to deactivate or decommission a well, please see the Living Water Smart guidance on the Best Management Practices for Decommissioning Water Supply Wells.”

For additional information on groundwater licensing and the legislation, click here.

To apply for a water authorization, please visit FrontCounterBC.

A Record-Setting Start to 2021

For the complete news release, including detailed statistics, click here.

The British Columbia Real Estate Association (BCREA) reports that a total of 7,169 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in January 2021, an increase of 63.3 per cent over January 2020 and over a thousand sales higher than the previous record for the month of January. The average MLS® residential price in BC was $845,169, a 16.1 per cent increase from $728,269 recorded in January 2020. Total sales dollar volume was $6.1 billion, an 89.6 per cent increase from last year.

chart

“It was once again a record-setting month for the provincial housing market,” said BCREA Chief Economist Brendon Ogmundson. “While sales were strong across all regions of the province, the Fraser Valley, Interior and Vancouver Island regions shattered previous sales records and pushed January sales to new heights.”

Total active residential listings were down 21.5 per cent to 20,254 units in January, the lowest level of provincial active listings on record, going back to 2000. With strong sales and so few listings, market conditions are exceptionally tight with less than three months of total supply.

“The supply of listings continues to be held back by the pandemic,” added Ogmundson. “With so few listings, markets are starved for supply and prices are under extraordinary pressure.”

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For more information, please contact:

Brendon Ogmundson
Chief Economist
Direct: 604.742.2796
Mobile: 604.505.6793
Email: bogmundson@bcrea.bc.ca

Powers of Attorney Can Be Tricky

Licensees must be aware of the challenges that exist when representing someone who claims to have the legal right to act on behalf of a property owner on the basis of a power of attorney. Is the power of attorney valid? Was it properly executed? Does it empower the attorney to deal with real property? Has it expired? Has it been revoked? Has it been terminated through the death of the grantor? These are all questions that must be ascertained by the licensee before proceeding.

In 2018, two licensees were approached by Seller A wishing to list a property for sale. A title search revealed that the property was owned jointly by Seller A and their spouse, Seller B. Seller A advised the licensees that Seller B was confined to a care home and Seller A had a power of attorney (POA) to act on Seller B’s behalf. The licensees had never dealt with a POA before, and they generally took Seller A’s assertion at face value. They did review some 2009 correspondence from Seller A’s lawyer indicating there was a POA between Seller A and Seller B. However, the licensees did not obtain a copy of the POA for the deal file, a contravention of their local Board’s MLS® Regulations regarding listing properties where POA’s were involved. They also did not advise Seller A to seek independent legal advice to ensure the POA was valid. It appears that the licensees did not read, or did not understand, the POA or the lawyer’s correspondence, which clearly indicated that the POA gave authority for Seller B to act for Seller A, rather than the other way around.

The two licensees marketed the property and eventually received an offer to purchase from a buyer, which was accepted by Seller A in their own right and as the attorney for Seller B. Subjects were removed and the transaction was slated to close on April 19. On April 4 the conveyancing lawyer for the sellers advised the licensees that a copy of the POA was needed to complete the transaction. Seller A finally provided the lawyer with a copy of the POA on April 10. The lawyer immediately realized that the POA did not provide Seller A with the authority to act for Seller B. The lawyer attempted to save the transaction by getting Seller B to consent to the transaction in their own right but discovered that Seller B did not have the legal capacity to sign the required legal documents. The transaction could not be completed. As a result of the failure of the transaction, Seller A defaulted on the purchase of another property which they were intending to acquire with the proceeds of the failed transaction.

The buyers lodged a complaint with the Real Estate Council of BC (Council), concerning the actions of the two licensees. The licensees were found guilty of failing to take sufficient care to ensure that Seller A had the legal authority to sell the property and failing to advise Seller A to seek independent legal advice concerning the POA. The licensees were fined $20,000 plus costs, a substantial penalty.1

In addition to their transgressions regarding the POA, the licensees were found to be in contravention of Rule 3-2 by failing to promptly provide to their managing broker all documents relating to the transaction (they waited 8 days before filing the subject removal document) and by failing to keep their managing broker informed of the real estate services they were providing (they waited 10 days before advising their managing broker that there was a problem with the POA that might result in the transaction not completing). I mention these last two contraventions because I am seeing them creep into more and more discipline decisions. Licensees must be aware of and comply with Rule 3-2, which requires them to promptly file documents with their brokerage and keep their managing broker informed of the real estate services they are providing. Yes, I know licensees are independent contractors. Yes, I know they conduct much of their business electronically. Yes, I know they don’t visit the brokerage as often as they used to. However, none of that absolves a licensee of their obligations under Rule 3-2 (1) and (2) to promptly provide their managing broker with the original or copies of all necessary documents and keep their managing broker informed of the real estate services they are providing. As you can see from this case, 8 days is not considered prompt.

It is instructive to note that the licensees had not encountered a POA before this transaction. However, ignorance is no defence. If a licensee does not think they have the skill and expertise to conduct a transaction, they should refer it to a licensee that does. If they do not refer it, they must take steps to acquire the necessary knowledge to enable them to act with reasonable care and skill. There are tremendous resources available from Council, BCREA, local Boards and Associations, brokerages, managing brokers and more experienced licensees. Licensees are obliged to take advantage of those resources.

1. RECBC decision published October 7, 2020 GWH and KM, representatives, Royal LePage Kelowna, Kelowna.

New Commercial Rent Assistance Program

CERS is intended to be used by organizations that have experienced a loss of revenue due to COVID-19. CERS will subsidize up to 65 per cent of rent or commercial mortgage interest on a sliding scale based on decline in revenues. The program also provides an additional top-up subsidy of 25 per cent for eligible organizations temporarily shut down by a mandatory public health order. CERS is available retroactively from September 27, meaning that it doesn’t help businesses that had to shut down in the spring.

The periods for which organizations can apply mirror the periods used for the ongoing Canada Emergency Wage Subsidy program. Currently, organizations can apply for periods until December 19, 2020. After that time, the federal government will adapt and target the program as needed. The program is set to continue until June 2021.

CERS incorporates both of BCREA’s recommendations to improve CECRA:

  1. The subsidy will provide payments directly to the affected organizations, without requiring landlords to apply.
  2. CERS also has no minimum revenue drop required to qualify.

BC is facing the most challenging time of this pandemic, with increased case counts resulting in the introduction of more strict public health orders. CERS can provide relief to many commercial tenants, including REALTORS®, as we all adapt to continuously shifting market conditions.

To learn more about the eligibility requirements, visit the CERS website.

Real Estate Professionals Urged to Stop Open Houses: Regulators and Provincial Association Recommend Virtual Tools

Vancouver, BC – November 05, 2020. The regulatory agencies overseeing real estate professionals in BC and the provincial association representing REALTORS® are calling on real estate professionals across the province to protect public health and safety by temporarily discontinuing open houses. With cases of COVID-19 on the rise in BC, the Real Estate Council of BC (RECBC), the BC Real Estate Association (BCREA), and the Office of the Superintendent of Real Estate (OSRE) are together strongly advising real estate professionals not to hold open houses for properties for sale or rent, to limit face-to-face interactions and to use virtual tools whenever possible.

“RECBC, BCREA, and OSRE share the position that open houses should not be held at this time,” said Erin Seeley, CEO of RECBC. “Protecting the public during the pandemic remains our top concern. Real estate professionals in BC have been very successful in using virtual tools to limit in-person interactions with clients, and we encourage them to continue those innovative practices to keep themselves, their clients, and community members safe.”

The recommendation to temporarily end open houses follows the issuing of an order last week by the Public Health Office limiting the number of attendees at an event in a private residence to six. Real estate professionals must follow the guidance from the public health office when conducting any in-person showings. Real estate professionals are advised to continue discussing the risks of in-person showings with their clients, and to recommend that their clients use virtual tools to show and view properties.

Darlene Hyde, CEO of BCREA, said “BC Realtors rose to the challenge of the first COVID-19 wave by embracing innovative virtual technologies to serve consumers while helping keep communities safe. With transmission rates increasing, Realtors can continue to show leadership in their communities by reducing in-person interactions, wearing masks and adapting to new public health guidelines and orders.”

Micheal Noseworthy, Superintendent of Real Estate, noted “It is important for the real estate industry to maintain public trust and confidence by continuing to work in a manner that protects the public. By following the advice and recommendations of the regulators, public health officials, and government, we can help reduce the spread of COVID-19, while continuing to provide essential real estate services that British Columbians rely on in their daily lives.

Information for real estate professionals and consumers on the use of virtual tools and on how to safely conduct in-person showings is available at www.recbc.ca and www.bcrea.bc.ca.