As British Columbia faces ongoing economic challenges and an expected rise in domestic tourism, the BC Real Estate Association (BCREA) is urging the provincial government to revisit its short-term rental (STR) laws to better balance housing needs with regional economic realities.

Since the Short-Term Rental Accommodations Act came into effect, it has aimed to increase housing availability. However, the unintended consequences have strained local economies—especially in tourism-heavy and rural areas.

Why Reforms Are Needed

With travel and tourism demand increasing and hotel availability tightening, BCREA says now is the time for more flexible STR rules. While recognizing the urgency of BC’s housing crisis, REALTORS® argue that STR restrictions must account for the province’s tourism, healthcare, and entertainment industries.

Here are four key recommendations BCREA has proposed:

1. Restore Local Zoning Authority

Current legislation limits local governments’ ability to exempt areas from the principal residence requirement unless their vacancy rate has been at or above 3% for two consecutive years. This threshold is too strict for many communities—like Parksville, which hasn’t hit that mark in over 20 years, and Prince George, which fell just short in 2023.

BCREA recommends returning more zoning control to municipalities, allowing them to request exemptions for specific zones or buildings originally designed for STR use. This would help communities tailor STR policies to their specific needs rather than applying a rigid province-wide standard.

2. Clarify and Expand Strata Hotel and Fractional Ownership Exemptions

While strata hotels and fractional ownership properties were granted limited exemptions, the criteria are confusing and overly complex, excluding many buildings designed for tourism and short-term stays. These properties often cannot accommodate long-term tenants due to their design and purpose.

BCREA urges the government to fully exempt these property types from STR restrictions, noting that excluding them has harmed local tourism economies and created unnecessary legal uncertainty for property owners and REALTORS®.

3. Create Exemptions Near Major Healthcare Facilities

In rural and northern BC, hospitals serve large surrounding areas. Patients and healthcare professionals often rely on STRs for short stays.

BCREA proposes geographic exemptions for STRs within defined zones around healthcare centres, similar to how the province approaches transit-oriented housing policy. This would support travelling nurses, doctors, and patients needing temporary accommodation without pushing them into costly hotel stays.

4. Support the TV and Film Industry with STR Access

BC’s film and television industry brings in substantial revenue, but the current STR rules have limited housing options for transient cast and crew, placing further pressure on hotel availability and increasing lodging costs.

BCREA is calling for broad STR exemptions for the entertainment sector, arguing that more flexibility is essential to sustain BC’s competitiveness in this industry. 

Final Word from BCREA

“The BC provincial government has the challenging job of balancing housing policy with overall provincial economic well-being,” says Trevor Hargreaves, Senior VP of Government Relations at BCREA. “Some key changes to current short-term rental legislation would help many people and communities across the province while maintaining the spirit of the original policy.” Altin Yousefi : RE/MAX Crest Realty : For Rent

BC Real Estate: New short-term rental exemptions - The Golden Star

The start of 2025 marked a noticeable shift in British Columbia’s housing market compared to a year earlier, with home sales slowing and listings increasing. Altin Yousefi : RE/MAX Crest Realty : Search all listings

📉 Sales Slowdown

While Q1 2024 saw sales rise 8.9% from the previous quarter, Q1 2025 experienced a sharp 13.3% drop from Q4 2024, and a 5.1% decline year-over-year. This slowdown came alongside increases in mortgage arrears (0.15% → 0.19%) and unemployment (5.5% → 6.0%).

📈 Inventory Growth

New listings in Q1 2025 jumped 12.8% from Q4 2024, while active listings surged 12.4% quarter-over-quarter and 27.0% year-over-year. Months of supply rose from 5.6 to 7.8. The sales-to-new-listings ratio fell to 38.1%, highlighting weakening buyer demand relative to rising supply.

💰 Price Softening

The Home Price Index declined 0.4% in Q1 2025 and was 1.3% below year-ago levels. Home construction also slowed, with a minor 0.5% quarterly decline and just 0.8% annual growth, down from 19.5% a year prior.

🧑‍🤝‍🧑 Population Growth Slows

Population growth also decelerated significantly—from 3.3% y/y in early 2024 to just 1.7% y/y in early 2025—further easing demand pressures.

Inventory Growth Surpasses Sales Decline In BC Residential Market

The Canadian Real Estate Association (CREA) has significantly cut its forecast for 2025 home sales, citing persistent concerns among buyers over tariffs and interest rates.

In a major revision — CREA’s most substantial between-quarter adjustment since the 2008–2009 financial crisis — the association now predicts 482,673 residential property sales in 2025. This is almost unchanged from 2024 levels and represents a sharp downgrade from the 8.6% growth CREA had forecast in January.

“Uncertainty around tariffs has been the main driver behind the slowdown in home sales,” said Shaun Cathcart, CREA’s senior economist. “What once looked like a sure-fire rebound year has turned into a scenario where simply maintaining momentum is a challenge.”

Data released Tuesday showed that March home sales dropped 9.3% compared to the same month last year, marking the weakest March since 2009. On a seasonally adjusted basis, sales also fell 4.8% compared to February, continuing a downward trend that began last November — with total sales down 20% since that peak.

“The dominant trend right now is uncertainty,” commented Katy Mackenzie, a mortgage broker with The Mortgage Group in Vancouver. “Many buyers are hitting pause on their home search.”

While the national average home price ticked up 0.3% from February to March, it remains 3.7% lower than one year ago. CREA now expects the national average home price to fall 0.3% in 2025 to $687,898 — about $30,000 lower than its January projection. Average prices in British Columbia and Ontario are expected to dip slightly, whereas other provinces may experience gains of 3% to 5%.

Mackenzie noted that while lower prices could benefit first-time homebuyers by reducing the mortgage needed, they pose challenges for homeowners looking to downsize in retirement.

“The idea of selling for less is tough for many retirees,” she said.

The CREA report also highlighted a 3% increase in new home listings from February to March. However, with sales declining, the sales-to-new listings ratio dropped from 49.7% to 45.9%, the lowest since February 2009.

Mackenzie added that the market dynamics vary: some buyers face limited property options, while others encounter multiple-offer situations. Meanwhile, savvy investors are taking advantage of lower prices and more room for negotiation.

“Lower sales create more negotiation power for buyers,” she said.

Amid market instability, Mackenzie emphasized the importance of long-term planning.

“My advice is always: Do you have a plan? Can you afford it? Do you qualify? How will it fit your life three to five years down the road?” she said. “Having a broader plan helps you ride out short-term market changes with less worry.”

Canadian Real Estate Association downgrades sales forecast for 2025 as buyers remain wary - The Globe and Mail

For several years, there has been widespread public support for taxing and restricting foreign homebuyers.
However, with economic uncertainty, rising tariffs, and volatility in global stock markets further slowing an already weak local pre-sale condo market and delaying purpose-built rental projects, discussions about the advantages and disadvantages of adjusting foreign buyer rules have resurfaced.

Current Landscape of the Discussion

The conversation around foreign buyers is unfolding across the development industry, the federal election scene, and academic circles.

What Are the Current Rules?
At the federal level, Canada has a two-year ban (extended until January 2027) on non-Canadians purchasing residential properties in major urban centres and nearby regions.
In British Columbia, the NDP government raised the foreign buyers' tax to 20% in 2017 and introduced additional speculation and vacancy taxes.

Industry Perspectives
An increasing number of real estate professionals are advocating for partially reopening the market to foreign investors to help fund complex, higher-cost developments.
In March, Vancouver real estate marketer Bob Rennie proposed a model where both local and foreign investors could contribute to building long-term rental housing—on the condition that they commit to holding these properties for at least 25 years.

This strategy could provide developers with the capital needed to move projects forward. Currently, developers struggle to secure enough presale buyers to launch condo construction, and building purpose-built rental units remains challenging due to the higher upfront cash requirements.

“If governments aren’t willing to lower their fees or ease building regulations, I’ve been advocating for allowing foreign investment in new homes again,” said Evan Allegretto, B.C. president of Vancouver-based Intracorp Homes.

“Most of these homes eventually enter the rental market anyway. Allowing foreigners to purchase new homes—similar to what Australia recently implemented—could inject the necessary capital to speed up project starts.”

In response to soaring housing prices, Australia recently introduced a two-year ban on foreign purchases of existing homes, while still permitting foreigners to buy new properties.

Balancing Protection and Capital in the Housing Market

Allowing selective foreign investment could protect parts of the local market from price surges while injecting much-needed capital into new developments, explained Evan Allegretto of Intracorp Homes.

Brent Sawchyn, CEO of Vancouver-based PC Urban, also supports adjusting foreign buyer rules. He noted that developers like PC Urban often work around current restrictions by investing more upfront, negotiating for policy changes, requesting minor density increases, or deferring development charges to keep projects viable.

Federal Political Party Positions

• NDP: Leader Jagmeet Singh advocates for a permanent ban on foreign homebuyers to prevent speculative price increases.

• Liberals and Conservatives: Neither party has officially commented on modifying foreign buyer rules. Although Bob Rennie has discussed a rental investment model with Liberal figure Mark Carney, no formal position has been announced. Both parties declined to respond to Postmedia inquiries.

Public Opinion
A March survey of 796 British Columbians by Research Co. found that 75% support a two-year ban on non-Canadians buying residential properties.
However, support for proposals allowing foreign investors to fund rental housing was not measured.

In a national poll from early April:

• 25% of voters aged 18–34 ranked housing as the most important issue, compared to 12% of older voters.

• Younger voters, more concerned about affordability, are less likely to favor models that involve enabling foreign investors to become landlords, noted Mario Canseco, president of Research Co.

Academic Perspective
A recent paper in the Journal of Ethnic and Migration Studies argues that restrictions on foreign capital have helped moderate price increases in cities like Vancouver.

Andy Yan (SFU City Program), Joshua Gordon (McMaster University), and David Ley (UBC) suggest:

• Bans targeting foreign money flows are different from policies simply restricting foreign buyers based on citizenship.

• Australia’s approach—allowing foreigners to buy only new properties while maintaining strict oversight—is more robust than Canada’s looser system.

Yan warned that allowing foreign investment to fund private rental developments risks repeating the failures of previous immigrant investor programs, which were criticized for lacking the promised economic benefits and being prone to abuse.

Is it time for Canada to relax restrictions on foreign buyers and investment in real estate?