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Expanding access to real estate sales and listing data benefits competition and consumers alike – Financial Post

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Real estate portals generate competition, inform buyers and draw even more attention to listings

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The owners of real estate sales data in Canada have gone to great lengths to restrict unauthorized access to and use of that data, but the Competition Bureau and many within the industry have long argued for freer access to data to enhance competition.

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The matter seems far from settled despite years of litigation and rulings. As a result, some real estate boards continue to file legal notices against property technology companies that try to gain access to their data and remind them of the integrity of their digital infrastructure.

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Real estate transaction and listing data in Canada is disseminated via the Multiple Listing Service (MLS) systems, which are owned and maintained by the real estate boards. A collaborative agreement facilitates the sharing of data between and amongst boards. Realtors usually register with one or more boards and then become eligible to list properties on the MLS system, which can then be reviewed by prospective buyers and their agents online for free.

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The boards, of course, are motivated to protect the integrity of data they collect, maintain and disseminate, either by themselves or with help from others. The improper use of that data or access by unauthorized entities is a valid industry concern, but so is the commitment to promote competition and prevent monopolies.

A recent industry-sponsored paper by Paul Johnson and Anthony Niblett pointed out the success of the MLS system lies in its “network effects.” As more homes are listed on the system, more buyers are attracted to it, which motivates more sellers to list their properties. This reinforcing loop of more listings leading to more buyers leading to even more sellers creates the so-called network effect.

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The authors offer three recommendations to preserve and expand this system’s value. First, it recommends realtors be required to list all properties on MLS. Currently, the system operates as a voluntary listing service, so realtors can decide to handle the transaction alone or within their brokerage.

Before the real estate industry embraced the internet, the practice of keeping listings off the MLS system was prevalent among large brokerages that would double end the sale by having agents from the same brokerage represent the buyer and the seller. However, such practices are unlikely to be in the best interests of consumers, so requiring all properties to be listed (with some exceptions) is a worthwhile consideration.

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Their second recommendation is that MLS “must continue to leverage highly effective portals” through which real estate data is disseminated. The most recognizable real estate portal in Canada is Realtor.ca, which is operated by the Canadian Real Estate Association, the sponsor of the study.

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At the same time, proptech companies and digital–first brokerages also provide listing data with additional information about neighbourhoods and previous transaction prices through virtual office websites. Portals generate competition, inform buyers and draw even more attention to listings. The industry, therefore, benefits from such portals.

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The third recommendation is about limiting access to MLS data. The authors said unfettered access to listing data might discourage sellers from listing their property on MLS, but we believe such privacy concerns are a red herring.

Sellers willingly consent to have photographs of their bedrooms and washrooms made freely available online to anyone in the world when they list their properties on MLS. If privacy was a concern, sellers would be more cautious. Yet the millions of homes listed on MLS containing photographs, 3-D renderings of floor plans and videos suggest privacy concerns are not a deterrent.

The authors said “any entity whose access to MLS Systems is used for the transaction of real estate would presumptively create value and should (continue to) have access.” But realtors are not the only ones who create value. Most real estate transactions do not take place without home inspectors, lawyers, financial institutions and others getting involved.

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With advances in artificial intelligence and communication technologies, the real estate sector is ripe for constructive disruption that will benefit consumers while safeguarding the intellectual property rights of those who collect and store real estate data. Restricting the definition of value-adding entities to those who market real estate is not in the best interest of consumers.

Murtaza Haider is a professor of real estate management and director of the Urban Analytics Institute at Toronto Metropolitan University. Stephen Moranis is a real estate industry veteran. They can be reached at the Haider-Moranis Bulletin website, www.hmbulletin.com.

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In Uncertain Times, Vancouver Island’s Real Estate Market Serves Stability

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A real estate investment will always benefit you in the long run, but the hard part of playing the realty game is timing: understanding when to sell and when to buy as markets ebb and flow with the economy. In British Columbia’s real estate market, Vancouver Island makes this a little bit easier.

While the Lower Mainland market has largely been reactive to this year’s numerous (and ongoing) Bank of Canada interest rate hikes, Vancouver Island has remained relatively stable — a few small bumps, rather than a rollercoaster.

“Sales have increased month over month and pricing remains relatively stable, with just a slight dip over this time last month,” says Christine Ryan, Vancouver Island-based Sales Manager at Sotheby’s International Realty Canada. “This would indicate that the rate hike has contributed to slight pricing adjustments, but has had no effect on the purchasing activity of buyers.”

Meanwhile, over in Metro Vancouver, residential sales increased by about 12.8% from September to October, according to the latest statistics by the Real Estate Board of Greater Vancouver (REBGV), but were actually down 45.5% compared to October 2021, and down 33.3% compared to the October average of the past 10 years.

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Ryan says that after a relatively quiet summer and early fall season, the sales activity the Vancouver Island real estate market is currently experiencing indicates that prices are more or less an accurate reflection of market conditions, and that “buyers are responding favourably.”

“Sales are up overall 17% over the previous month in Greater Victoria, with a 3% increase elsewhere on the Island,” Ryan says — and that’s often the case on the Island this time of year.

A quantitative way to identify which way a real estate market is leaning is to look at the sales-to-active-listings ratio (SAR), dividing the number of sales by the total amount of active listings. A ratio of under 12% is usually defined as buyers market, a ratio over 20% generally indicates a lean towards sellers, and anything in between shows balance in the market. According to the Vancouver Island Real Estate Board‘s statistics, October registered 249 sales and the amount of active listings hit 1,360, giving us a ratio of 18.3% that indicates a healthy balance.

“We typically have a relatively healthy fall market on the Island. Our temperate climate attracts snowbirds who tend to travel west and property shop in the fall. I would suspect that the desire to be settled in a new home for Christmas and the New Year is a driver for this seasonal increase in market activity. Clearly, motivated sellers and motivated buyers are coming together to strike a deal with the guidance of their respective realtors.”

As Ryan has previously said, Vancouver Island is blessed with one of the most stable real estate markets in Canada, and that stability becomes even more appealing when the surrounding markets are in a constant state of flux and uncertainty. Extreme highs can be fun, but that can often mean extreme lows are possible too.

Sometimes, there’s nothing better than stability and reliability.


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Big White real estate values have spiked despite a slowdown in sales, report says

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Prices for vacation homes at Big White exploded this year despite a slowdown in sales, according to the Royal LePage Winter Recreational Property Report released Tuesday.

The Royal LePage report indicates that the median price of a single-family detached home in Big White’s recreational property market for the first 10 months of the year increased 45.5 per cent year-over-year to $1,600,000, while the median price of a condominium increased 11.1 per cent to $500,000.

A house or condominium slope-side or at mountain base prices typically starts at $900,000 and $400,000, respectively.

That price jump for single-family detached home is the biggest in the province. In contrast, Sun Peaks saw a 13-per cent increase, Revelstoke saw a 13.3-per cent increase and Whistler saw a 14.9-per cent increase.

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Royal LePage expects the upward price trajectory will continue into 2023 and estimates a rise by another seven per cent.

Despite the rising cost of a resort area home, total sales were down 33 per cent year-over-year in the region,

“Transactions at the upper end of the market are largely responsible for the dramatic price increases in the single-family segment, as Big White continues to attract luxury recreational property buyers,” Andrew Braff, sales representative, Royal LePage Kelowna said in a press release.

“However, demand has slowed over the last year as buyers adjust to the rising interest rate environment and sellers feel less urgency to list their properties.

“As activity moderates, we are seeing fewer multiple-offer scenarios compared to last year.”

Braff noted that luxury property owners are less impacted by changes in the market, and are more likely to keep their properties in the family long term, for several generations to enjoy.

In addition to local buyers, the world-renowned ski region attracts demand from across the border and around the globe. However, pandemic travel restrictions over the last two years have forced some international homeowners to visit their recreational properties less frequently.

Thirty-two per cent of U.S. citizens living in border states who currently own a recreational property in Canada have purchased a home in British Columbia. Of those who plan to purchase recreational property in Canada, 33 per cent say they intend to purchase in the province.

Big White is not the only resort seeing this kind of real estate increase.

Canada-wide popular ski regions have posted double-digit year-over-year home price appreciation since the beginning of 2022, despite rising interest rates and price declines in the residential market. Nationally, in the first 10 months of the year, the median price of a single-family detached home increased 15.1 per cent year-over-year to $1,042,700.

All recreational regions surveyed recorded double-digit declines in the number of homes sold during the first 10 months of 2022, compared to the same period last year, when demand for properties reached historical highs.

Royal LePage recreational property market experts across the country report more balanced conditions and an increase in inventory, compared to 2021.

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How much are real estate prices going to drop in the GTA?

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The average price of a house is forecasted to drop by nearly 12 per cent in the Greater Toronto Area (GTA) next year.

According to Re/Max Canada’s housing market outlook for 2023, the GTA’s currently balanced market is expected to continue next year.

As per the report, house prices rose 11 per cent from $1,086,155 last year to $1,203,916. But for 2023, average residential sale prices are expected to drop 11.8 per cent to about $1,061,854, which is a roughly $142,000 price difference.

As prices start to decrease, Re/Max says there will be three main trends that will carry on into the new year.

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“Continued interest rate increases and associated price adjustments, rising unemployment due to an economic slowdown, and new opportunities to engage in the market for buyers and sellers because of improved affordability,” Re/Max Realtron Realty broker, Cameron Forbes, said

This could be good for prospective homebuyers, as Forbes says there will be fewer competitors to deal with, reduced prices and more options to choose from on the market.

“Meanwhile, sellers will have a trade-up advantage, reduced competition of listings, a stronger ability to re-locate to the suburbs, and have all of the advantages that buyers do, too,” Forbes said.

Currently, the most desirable neighbourhoods are based on location, affordability, and access to transit.

The continued rising interest rates, however, will still make it a slower real estate market for all in the GTA. Re/Max notes this will particularly impact first-time homebuyers, as many choose to put their dreams of owning real estate on the back burner due to a lack of affordability.

Toronto’s luxury real estate market is also expected to continue to cool down next year due to economic pressures.

“It’s important to also consider some key context for the GTA. The pandemic between Spring 2020 and early 2022 were outliers in terms of pricing and demand, and factoring out those years in assessing what lies ahead for the region is important as we slowly tilt back to a post-pandemic recovery,” Re/Max Canada President, Christopher Alexander, said in the report.

“This moderating market is an opportunity for homebuyers to take the time to consider their needs, assess opportunities patiently and ultimately make a wise purchasing decision and investment in the long run.”

On top of the GTA, Durham region, London, Kitchener-Waterloo, Barrie and the Georgian Bay area are expected to see average house prices decline between two to 15 per cent next year.

Hamilton, Burlington, Oakville, Brampton, Mississauga, Niagara, and Peterborough are among some of the regions where sale prices will actually increase between two to eight percent in 2023.

“Hamilton-Burlington, Brampton, Mississauga and Niagara are buyer’s markets, while Sudbury, Muskoka, Durham York Region, Haliburton, Ottawa and Peterborough and the Kawarthas favour sellers,” the outlook report reads.

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