Original lawsuit involves brokerages in Greater Toronto Area
The scope of a legal challenge alleging price fixing within the residential real estate industry has been widened to include all regions of Canada, thanks to a second class-action lawsuit filed last month.
The new statement of claim was officially filed in the Federal Court on Jan. 19, according to Kalloghlian Myers Limited Liability Partnership (LLP), the law firm that is pursuing the claim.
The new claim contends that real estate brokerages nationwide — with the exclusion of the Greater Toronto Area — engaged in illicit practices, leading to unjustifiable increases in residential real estate commissions. Additionally, it alleges the Canadian Real Estate Association (CREA) and local real estate boards across the country helped facilitate these alleged violations.
It follows an original class-action lawsuit involving brokerages in the Greater Toronto Area (GTA)
Central to the case is a regulation compelling home sellers using the Multiple Listing Service (MLS) to offer a commission to the buyer’s real estate brokerage. The lawsuit contends that this rule, wherein sellers foot the bill for buyer brokerage services, stifles competition in the buyer brokerage side of the market, resulting in elevated commissions within an already fiercely competitive market.
In the legal filing, the plaintiff, Kevin McFall of Milton, Ont., says he enlisted representation from Royal LePage Meadowtowne Realty, which concurrently acted on behalf of the buyer in the transaction.
“For Canadians, these commission expenses are a very substantial cost on the sale of a home and they erode people’s savings,” Paul Bates of Bates Barristers P.C., a legal professional involved in the suit against CREA, said.
“The contention in both cases, including the recently filed case for all the geographies outside the GTA is that the buyer broker commission should not be forcibly taken out of the seller’s sale proceeds, and that commission should be negotiated by the buyer broker with the buyer. And in that event, the commission would be far far less than it has,” Bates said.
John Syme of John Syme Law, another lawyer working on the case, said a favourable outcome could lead to compensation and alterations in the regulations overseeing commission payments.
In both cases, the legal teams are seeking compensation, not only for their clients but also for individuals who have bought residential real estate since 2010.
Syme said that a change to the rules might involve altering the current mandate where real estate sellers are obligated to cover the costs of services utilized by buyers.
According to Bates, the GTA case is anticipated to reach a resolution within the next two to three years but the “pay scheduling is an ongoing endeavour.”
“The outside GTA case should conclude a couple of years after,” Bates said.
In September, when the Federal Court green-lit the class-action lawsuit against the GTA real estate industry, the Canadian Real Estate Association issued a statement.
“We continue to believe the claims against CREA and other defendants are without merit, and we will continue to defend our members in this case,” it said at the time.
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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
The Canadian Press. All rights reserved.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
The Canadian Press. All rights reserved.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
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