The prevailing industry view opposes the Liberal Party's proposal
Real estate bodies are pushing back on Ottawa’s plan to ban blind bidding as part of the Liberal Party’s budget proposal on April 07.
Blind bidding is the widely used practice in which offers are kept secret when someone is auctioning a home and is said to be the main driver for inflated price gains in an already hot market. It is believed that secret bidding forces each potential buyer to offer as much as they can, which could be thousands of dollars above the next highest offer.
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For many realtors like Pierre Leduc, spokesperson for the Canadian Real Estate Association, and Daniel John, chair of the Real Estate Board of Greater Vancouver, prohibiting blind bidding will do little to lower house prices and will instead limit homeowner choices.
“Canadians have the right to choose how they want to sell their home, which is likely the largest transaction of their lives, and banning blind bidding removes that choice,” Leduc said.
On the other hand, industry experts like Douglas Porter, chief economist at BMO, want to put a prime on transparency. Alan Carson, chief executive officer of Carson Dunlop Home Inspections, said the ban would enable buyers to make an “informed decision.”
“Anything that improves price transparency, especially when the market is exceptionally tight, would ultimately be a good thing,” Porter said.
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If it pushes through, only Ottawa can ban the practice since real estate laws are dictated by the provinces and territories. As such, the Liberal Party has proposed that the housing minister works with his provincial counterparts to establish the law across all of Canada.
However, Canada’s largest market has made it known that Ontario will not be backing the ban. Premier Doug Ford said he was not in favour of adding new regulations in a video posted by the Ontario Real Estate Association last week.
