Debate over real estate blind bidding overhaul heats up; industry, experts question affordability impact

With the federal government trying to make a push for an open bidding process for real estate deals, the industry argues this won’t make it easier to afford a home.

Citing examples of how an open bidding system works, the BC Real Estate Association’s chief economist argues it doesn’t actually drive prices down.

Brendon Ogmundson points to Australia, where prices shot up 24 per cent in 2021, as an example of how dropping blind bidding won’t be a magic solution to high home prices.

Ogmundson also referenced New Zealand and Sweden as other markets where open bidding is common, but says it hasn’t necessarily shielded them from home prices rising at levels we’ve seen here.

“Prices don’t get to where they are because of the way a transaction happens,” Ogmundson told CityNews. “A lot of what we’re trying to deal with is really symptoms of having market that has a fair amount of demand for obvious reasons — low interest rates, a recovering economy, and very few listings.”

UBC economist Tom Davidoff with the Sauder School of Business believes there are more fundamental issues driving high prices in our market. He points to a tax system encouraging people to use homes as investments, and a supply shortage.

“Generally speaking, I think all of the steps that have been floated recently [by governments] about the transaction process are about consumer protection,” Davidoff told CityNews. “I don’t think they’re about the macro picture of too much demand for not enough supply.”

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As for whether blind bidding will even actually be dropped, it’s worth noting without the provinces signing off, this may be a non-starter to begin with.

The federal government proposed moving away from blind bidding as part of its budget announced earlier this month.

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