The Liberal Party of Canada’s election promise to end blind bidding is being excoriated by the Ontario Real Estate Association (OREA), which accused the sitting government of trying to “criminalize the ability for hardworking Canadians to choose how to sell their homes.”
The party’s housing plan ahead of the September 20 election includes a pledge to “build, preserve, or repair” 1.4 million homes—a vague statement pertaining to Canada’s supply problem—but deciding how Canadians sell their homes hit a nerve with OREA and compelled the association to eviscerate the Liberals in a strongly worded statement entitled Liberal Housing Plan to Criminalize Hardworking Families.
“You cannot fix Canada’s housing crisis by denying millions of hardworking families the choice of how to sell their home and by pitting homeowners against buyers. In fact, this plan would have the opposite effect—negatively impacting Canada’s housing market and making homeownership even more unaffordable,” said the statement from David Oikle, OREA’s president.
The statement also declared the crux of Canada’s housing crisis is low supply relative to exorbitant demand, which virtually every housing market analyst agrees with. But rather than addressing the issue of meagre supply, the Liberals are focusing on a consequence of the paucity, bidding wars.
“People are rightly concerned about rising home prices and the shortage of new listings and new homes, especially in Ontario. But the current landscape of bidding wars across Canada’s housing market is emblematic of a much larger issue: there is simply not enough supply to meet demand, leading to multiple offer situations and higher home prices,” continued the statement.
“That is why it is so concerning that the Liberal Party of Canada believes that buying and selling homes—already one of the most stressful experiences in life—should be done entirely through auctions. If a senior or a family used the traditional offer process, they would be a criminal under the Liberal plan.”
The real estate association also believes housing auctions worsen affordability, stating, “Auction fever creates a three-ring circus on front lawns, as hopeful buyers crowd in front of a home with a live auctioneer, or online, and the bidding begins.”
Davelle Morrison, a broker with Bosley Real Estate in Toronto, also panned the Liberals’ housing plan, likening it to someone “scrambling some ideas together on the back of a napkin.” Her biggest criticism, though, is the Liberals’ lack of cogency with respect to increasing housing supply.
“The policies focus on demand, and they want to make it easier for first-time buyers, but by doing that you are driving prices up because you’re putting more people in the market,” said Morrison. “Nobody is looking at supply. The only way to deal with the housing crisis is to bring more supply to market, but nobody seems to want to acknowledge that.”
Moreover, the party’s promise to proscribe foreigners from buying Canadian real estate for two years, which is similar to the Conservative Party’s pledge, doesn’t make much sense, she added.
“They’re placating people by talking about issues people want them to talk about rather than issues that actually help people.”