Putting the kibosh on “blind bidding’ -- the current standard practice of keeping all prospective homebuyers in the dark about the size of competing offers when bidding on a home -- was a cornerstone promise made during the federal Liberal’s election campaign, and in the most recent Federal Budget.
However, Canadians could be waiting some time for the policy to actually come to fruition, as Prime Minister Justin Trudeau has declined to offer any official timeline for implementation.
READ: Canada to Ban Blind Bidding as Part of Homebuyer’s Bill of Rights
In comments made to reporters in Ottawa on Thursday, Trudeau did not answer questions about when the Homebuyers’ Bill of Rights -- of which the blind bidding ban would be a part -- could be coming down the pipe. He also declined to answer questions on whether the government is considering tougher measures for domestic real estate investors, such as higher taxation on secondary and multiple properties.
According to the Budget, Minister of Housing and Diversity and Inclusion Ahmed Hussen will be embarking on consultations with the provinces and territories over the next year to determine a national plan to end the practice. To support its creation, the feds also announced $5M in spending to the Canada Mortgage and Housing Corporation (CMHC).
“Unfair practices like blind bidding or asking buyers to waive their right to a home inspection can make the process of buying a home even more stressful for too many Canadians,” the federal budget states. “To help level the playing field for young and middle class Canadians, the government will take steps to make the process of buying a home more open, transparent, and fair.”
It’s “Never Going to Happen”
While a popular proposal with voters, there is uncertainty among the real estate industry as to how a national blind bidding ban could be implemented and enforced; regulations that govern real estate transactions fall under the purview of provincial associations and not a national body, for starters.
In a previous interview with STOREYS, Vancouver realtor Steve Saretsky said that for this reason, he believes the promise is nothing more than government lip service.
“The blind bidding ban is never going to happen. Each housing market is provincially regulated so this has nothing to do with the federal government… And when you actually sit down and read through the budget, it’s like, well, hold on a minute, the wording here is very vague,” he said.
There’s also doubt from analysts as to whether such an approach would actually help cool housing prices. A report from think tank Smart Prosperity Institute has found that, contradictory to belief, banning blind bidding actually pushes prices higher based on case studies in Sweden, Australia, and New Zealand, which have open-auction systems for real estate transactions.
Most recently, the province of Ontario has waded into the issue, bringing forth new regulations to allow buyers see all other offer prices -- should the seller consent. The new rules would take effect next April as part of transitioning the Real Estate and Business Brokers Act 2002 (REBBA 2022), to the Trust in Real Estate Services Act (TRESA).
“Sellers will no longer be limited to selling their property through a closed or traditional offer system,” Minister of Government and Consumer Services Ross Romano said in a statement. “With these changes, hard-working Ontarians can rest assured knowing that our government has their backs as they embark on their journey of home ownership.”
