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A real estate sign hangs in front of a west-end Toronto property, on Nov. 4, 2016.Graeme Roy/The Canadian Press

The Canadian real estate industry is gearing up to fight Ottawa’s plan to ban a common home selling practice known as blind bidding.

The Liberal Party’s April 7 budget proposed to end blind bidding, in which competing buyers in a multiple-bid situation do not know what others are offering to pay for a home.

It has taken some of the blame for out-of-control competition during the pandemic’s real estate boom. Winning bids could sometimes be hundreds of thousands of dollars above the next highest offer.

But Canada’s national real estate association and other powerful industry groups oppose the federal plan, saying that ending blind bidding would not bring down prices and would deprive homeowners of the choice of how they want to sell their homes. Most sellers prefer blind bidding because they believe it can get them a higher price.

“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,” said Pierre Leduc, spokesperson for the Canadian Real Estate Association.

The Real Estate Board of Greater Vancouver said it has not seen evidence that such a government action would improve anything. “We worry that it could limit the options and rights of home sellers when selling their most important asset,” board chair Daniel John said.

The Toronto Regional Real Estate Board said policies must balance the rights of sellers with those of buyers and protect the rights of homeowners.

Real estate laws are governed by the provinces and territories, so Ottawa cannot unilaterally ban the practice. Instead, the budget proposed that the federal Housing Minister work with his provincial counterparts to implement the new law.

But Ontario – the country’s largest real estate market – has indicated it is not on board. Premier Doug Ford has said he supports fair competition, but does not want new rules.

“I am not in favour of adding new regulations,” Mr. Ford said in a video posted on the Ontario Real Estate Association’s Twitter feed.

Mr. Ford did not explicitly say he opposed the plan to end blind bidding, and a spokesperson did not respond to a request for comment.

OREA said the majority of its members oppose a blind-bidding ban. Its spokesman Matthew Thornton called it a “knee-jerk response designed on the back of a napkin” to help the Liberal Party win last year’s federal election.

It is not clear whether British Columbia would support a ban. The province has long struggled with housing affordability. It has implemented some of the strictest rules to curb foreign speculators and empty homes. The province is mulling a cooling-off period to allow buyers to change their minds after making an offer to purchase. B.C. Finance Minister Selina Robinson said her government needs to hear more about Ottawa’s “intentions on blind bidding to understand how it could align with the work the B.C. government already has under way.”

During last year’s real estate frenzy, some economists and even some realtors called for an end to blind bidding, saying it contributed to skyrocketing home prices. Bank of Montreal economists said a ban would keep the sale price from settling well above what the next willing buyer has offered. Re/Max Canada president Christopher Alexander said blind bidding had to be reformed and needed more transparency.

Now that borrowing has become more expensive, buyer demand has started to wane. Realtors have described homes taking longer to sell and say some are getting no offers, which used to be rare.

Re/Max’s Mr. Alexander has since softened his comments, and said he opposes a ban. “We can’t take away the right of homeowners. We can’t just put them at a disadvantage,” he said.

Katie Steinfeld, a realtor who runs auctions, agreed with the prevailing industry view. “Forcing only one way to sell is not fair in my opinion,” said Ms. Steinfeld, who runs On The Block Auctions Inc. She said that less than 5 per cent of her clients choose to sell their homes via an auction, preferring the blind-bidding process.

BMO chief economist Douglas Porter said the issue is less pressing given that activity has started to slow. Still, Mr. Porter stood by his previous position, saying “anything that improves price transparency, especially when the market is exceptionally tight, would ultimately be a good thing.”

Other real estate players support the proposal for a ban. Alan Carson, who has conducted home inspections for four decades, said it would create more trust in the process. “At least you know what other people are bidding,” said Mr. Carson, chief executive officer of Carson Dunlop Home Inspections. Buyers would be able to make an “informed decision,” he said.

Faizel Bhabha of Exp Realty Brokerage, who sells houses in the Toronto region, is one of the few realtors who supports a ban. “Fully transparent is always better,” he said.

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