Modern Solution Realty & Canadian Real Estate Latest News
May 19, 2022 - Visit CBC
Much of the discussion about Canada's real estate market has been dominated by the meteoric rise in the cost of housing.
But what's often missing from that conversation is the parallel increase in what Canadians pay in real estate commissions nearly every time a home is bought or sold.
For example, a brokerage representing a buyer in 2005 in the Greater Toronto Area would have earned a commission of about $8,795 on the average single-family home — while in December 2021, the buyer's brokerage would earn about $36,230, or four times more on that same home, according to Dr. Panle Jia Barwick, a leading economist on the real estate industries commission structure.
To put that jump in perspective, the median household income increased by just 14 per cent between 2005 and 2019, after adjusting for inflation.
That discrepancy is just one of the points laid out in a recent lawsuit, alleging price-fixing and anticompetitive behaviour in Canada's real estate market.
The class-action case launched on behalf of Toronto resident Mark Sunderland on April 9, 2021, claims that some of the country's largest brokerages, including ReMax, Century 21, and IproRealty Ltd. among others, as well as the Canadian Real Estate Association and the Toronto Regional Real Estate Board, have "conspired, agreed or arranged with each other to fix, maintain, increase or control the price … for buyer brokerage services in the GTA."
Commission structures vary across the country, but typically real estate agents and their brokerage charge a percentage-based commission on the sale price of a home. In Alberta and B.C., it's seven per cent on the first $100,000 and three per cent on the balance. In other parts of the country, commissions range between four and five percent.
While the seller pays the full commission, it's split between the brokerage representing them and the one representing the buyer.
Sunderland's lawsuit argues that the agreement known as the buyer brokerage commission rule, created by the Toronto Residential Real Estate Board and Canadian Real Estate Association, effectively forces sellers of residential real estate listed on the Multiple Listing Service (MLS) to pay the commission of the buyer's real estate brokerage.
Similar practices exist within many other real estate boards across the country.
This arrangement has thwarted competition in the market by pushing sellers to pay for something they would not pay for in the absence of this agreement, the lawsuit argues — and it negates the ability to negotiate the price or quality of the service.
"It's not a typical smoky room conspiracy; it's out in the open," said Garth Myers, a partner in Kalloghlian Myers LLP, the law firm that filed the case on behalf of Sunderland and anyone who has sold a home in the GTA since 2010.
The effect of this alleged price-fixing can be felt by those who don't offer the standard commission rate, said Barwick, the economist focusing on the real estate industry's commission structure.
The buyer brokerage commission rule "creates the incentive and ability for buyer brokerages to 'steer' buyers away from residential real estate properties where sellers offer lower than the norm buyer brokerage commissions," she wrote as part of research commissioned by Kalloghlian Myers LLP for the case.
Merely the fear that this could happen is enough to pressure sellers into offering the standard commission, she writes.
The practice of steering is further enabled by Realtor.ca, which allows real estate agents and brokers to see the amount of commission on offer but hides the information from public view.
May 09 2022 - Visit Brampton Guardian
House and condo prices in Brampton continued to cool in April in the wake of two straight interest rate hikes from the Bank of Canada.
The Toronto Regional Real Estate Board (TRREB) released its latest GTA market report for April on Tuesday (May 3) showing a 9.2 per cent decline in the combined average price for all dwelling types since hitting a record high in January.
The average price for detached and semi-detached houses, and townhouse and apartment condominiums dropped from $1,367,444 in January to $1,241,658, with all housing types seeing month-over-month price declines for a second straight month.
While prices have fallen in recent months, average prices for all home types remain up significantly year over year compared to last April.
“Despite slower sales, market conditions remained tight enough to support higher selling prices compared to last year. However, in line with TRREB’s forecast, there is evidence of buyers responding to increased choice in the marketplace, with the average and benchmark prices dipping month-over-month,” said chief market analyst Jason Mercer in TRREB’s April analysis.
The average price for detached homes in Brampton peaked in January at $1,652,088 and has fallen each month since to an average of $1,474,967 in April — a decline of $177,121 or 10.7 per cent in just three months.
Semi-detached homes hit a record high in February at a monthly average sale price of $1,262,256. Last month, semi-detached units sold for an average of $1,122,428, marking a $139,828 or 11 per cent in two months.
Price declines in the condo sector have been less pronounced with townhouse-style condos falling 8.4 per cent from a monthly average high of $910,184 in February to $833,411 last month.
Brampton apartment condos also set a record high in February at $693,955 and have declined 5.1 per cent in average price to $658,500 since hitting that high-water mark.
May 4 2022 - Visit Financial Post
The average home price of $1.254 million, though down from March, was up 15 per cent from last year, the Toronto Regional Real Estate Board said Wednesday.
Sales also declined in April, falling 27 per cent from the month before and 41 per cent from last year.
“Based on the trends observed in the April housing market, it certainly appears that the Bank of Canada is achieving its goal of slowing consumer spending as it fights high inflation,” said TRREB president Kevin Crigger in a press release. “Moving forward, it will be interesting to see the balance the Bank of Canada strikes between combatting inflation versus stunting economic growth and related government revenues as we continue to recover from and pay for pandemic-related programs.”