New York Fed board member warns of commercial real-estate risks

The Competition Bureau says it’s obtained a court order as part of an investigation into potential anti-competitive conduct by the Canadian Real Estate Association.

The bureau says its investigation is looking into whether CREA’s commission rules discourage buyers’ realtors fromoffering lower commission rates or whether they affect competition in other ways.

It’s also looking into whether CREA’s realtor co-operation policy makes it harder for alternative listing services to compete with the major listing services, or gives larger brokerages an unfair advantage over smaller ones.

The court order requires CREA to produce records and information relevant to the investigation, the bureau said, adding the investigation is ongoing and there is no conclusion of wrongdoing at this time.

CREA’s membership includes more than 160,000 real estate brokers, agents and salespeople.

The association said it’s co-operating with the bureau’s investigation.

In a statement, CREA chair James Mabey said the organization believes its rules and policies are “pro-competitive and pro-consumer” and help increase transparency.

Court documents show the bureau’s inquiry began in June, as the competition commissioner said he had reason to believe CREA engaged in conduct impeding the ability of real estate agents to compete.

The documents note CREA owns the MLS and Multiple Listing Service trademarks and owns and operates realtor.ca, which real estate groups use to list homes for sale.

Websites like realtor.ca are where the public can view home listings, while MLS systems contain data that’s only accessible to agents such as additional information on listings, sales activity in the area and neighbourhood descriptions. Some of this data is not publicly available for privacy reasons.

Access to the MLS system is a perk offered to members by real estate boards and associations.

The Competition Bureau in recent years has been reviewing whether the limited public access to these systems stunts competition or innovation in the real estate sector.

Property listings on an MLS system must include a commission offer to the buyers’ agent, and when a listing is sold, often the agent for the buyer is paid by theseller’s agent, according to the court documents.

They allege these rules reduce incentives for buyers’ agents to offer lower commissions because if buyers aren’t directly paying their agent, they may be less likely to select an agent based on their commission rate.

The bureau alleges the rules also incentivize buyers’ agents to steer their clients away from listings with lower-than-average commissions.

The documents also say CREA’s co-operation policy, which came into force at the beginning of 2024, favours larger brokerages because of their ability to advertise to bigger networks of agents.

The policy requires residential real estate listings to be added to an MLS system within three days of them being publicly marketed, such as through flyers, yard signs or online promotions.

The documents also allege the co-operation policy disadvantages alternative listing services as it’s harder for them to compete on things like privacy or inventory.

Last year, the Competition Bureau said it was investigating whether the Quebec Professional Association for Real Estate Brokers’ data-sharing restrictions were stifling competition in the housing market.

It obtained a court order in February 2023 related to the ongoing investigation, looking into whether QPAREB and its subsidiary, Société Centris, engaged in practices that harm competition or prevent the development of innovative online brokerage services in the province.

Much of the data-sharing activity in question was linked to an MLS for Quebec real estate.

— With files from Tara Deschamps

This report by The Canadian Press was first published Oct. 3, 2024.

The Canadian Press. All rights reserved.

TORONTO – The Toronto Regional Real Estate Board says home sales in September rose as buyers began taking advantage of interest rate cuts and lower home prices.

The board says 4,996 homes were sold last month in the Greater Toronto Area, up 8.5 per cent compared with 4,606 in the same month last year. Sales were up from August on a seasonally adjusted basis.

The average selling price was down one per cent compared with a year earlier at $1,107,291.

The composite benchmark price, meant to represent the typical home, was down 4.6 per cent year-over-year.

The board’s CEO John DiMichele says recently introduced mortgage rules, including longer amortization periods, will give home buyers more options and flexibility as the housing market recovers.

New listings last month totalled 18,089, up 10.5 per cent from a year earlier.

This report by The Canadian Press was first published Oct. 3, 2024.

The Canadian Press. All rights reserved.

Vancouver-area home sales dropped 3.8 per cent in September compared with the same month last year, while listings grew to put modest pressure on pricing, said Greater Vancouver Realtors on Wednesday.

There were 1,852 sales of existing residential homes last month, which is 26 per cent below the 10-year average, and down 2.7 per cent, not seasonally adjusted, from August.

The board says the results show recent interest rate cuts haven’t yet led to the expected rebound in activity, and that sales are still coming in below its forecast.

“September figures don’t offer the signal that many are watching for,” said Andrew Lis, the board’s director of economics and data analytics, in a statement.

The Bank of Canada has already delivered three interest rate cuts this year to bring its policy rate to 4.25 per cent. With further cuts expected at its next two decisions, including what some banks say could be a half-percentage-point cut, there’s still room for an upward swing in the market, said Lis.

“With two more policy rate decisions to go this year, and all signs pointing to further reductions, it’s not inconceivable that demand may still pick up later this fall should buyers step off the sidelines.”

For now though, there are many more sellers entering the market than buyers.

There were 6,144 newly listed properties in September, up 12.8 per cent from last year, to bring the total number of listings to 14,932. The total number of listings makes for a 31 per cent jump from last year, and is sitting 24 per cent above the 10-year seasonal average.

The combination of fewer sales and more listings left the composite benchmark price at $1,179,700, which is down 1.8 per cent from September 2023 and down 1.4 per cent from August.

The benchmark price for detached homes stood at $2.02 million, up 0.5 per cent from last year but down 1.3 per cent from August. The benchmark for apartment homes came in at $762,000, a 0.8 per cent decrease from both last year and August 2024.

The board says the sales-to-active listings ratio across residential property types was at 12.8 per cent in September, including 9.1 per cent for detached homes, while historical data indicates downward price pressure happens when the ratio dips below 12.

This report by The Canadian Press was first published Oct. 2, 2024.

The Canadian Press. All rights reserved.