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26 May

2014

Alycia

Facebook for condo dwellers? Vancouver entrepreneur launches social network for neighbours- Ask a Vancouver Mortgage Broker

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You’ve got Facebook for friends and LinkedIn for work associates. Now Joseph Nakhla thinks you need a social network for your neighbours.

The 40-year-old Vancouver resident is the founder of bazinga, which is designed to help neighbours connect to one another and to local resources.

Mr. Nakhla says he was inspired by his childhood in Egypt, where he grew up in a low-rise complex with five apartments. The people in those apartments helped each other out on a regular basis and grew close.

“I really felt a sense of community,” he says. It’s something that he thinks is generally lacking in Canada’s big cities. “I have a lot of friends that moved to Vancouver from other parts of the country that say it’s tough to meet people, and I’ve heard it in Toronto.”

Launched at the end of 2012, Bazinga enables all of the residents in a condo building or gated community or other form of neighbourhood to interact online. The social network has areas where residents can organize events or talk about local issues or ask for advice, and it also allows them to send private messages. People are using it to do things like set up potluck dinners and barbecues, share decorating ideas, and band together to lobby for local issues or talk about problems in their buildings.

The network also allows the developer or property manager to communicate with residents, and to upload a flood of documents, from notes from a condo board meeting to the owner’s manual for the microwaves.

At the moment about 400 communities or buildings are signed up, representing about 80,000 homes, Mr. Nakhla says. Its biggest market so far is Toronto, followed by Vancouver. Mr. Nakhla says his company has “good” revenues, but is not turning a profit yet.

For now, developers, property managers, strata or condo boards pay to sign up and then residents can access the network for free.

Mr. Nakhla says bazinga is more than just social. “There are all kinds of complaints about condo living and apartment living – logistical challenges, getting a hold of your property manager, you’ve got concierges and people that own the units and people that are renting – it’s a pretty complex ecosystem. So I looked at it and thought,‘Man, wouldn’t it be great to have a platform that brings everybody in.’”

Undoubtedly, there are many people who prefer to remain anonymous within their buildings, and who don’t want another social network.

“We’ve seen everything,” Mr. Nakhla says.

“We’ve seen people that are exceptionally social and put an avatar of themselves up, put their profession on there, put information about themselves. And we’ve also seen people that just put their initials.”

For those who prefer not to interact with their neighbours, instead of getting up at 2 a.m. to pound on the door down the hall because the music’s too loud, now they can make their feelings known from their smartphone.

Follow Tara Perkins on Twitter: @taraperkins

Tags: Bruce Coleman, Entrepreneurs, self-employed, Vancouver Mortgage Broker

25 May

2014

Alycia

Canadian housing market on brink of downturn: report – Ask a Vancouver Mortgage Broker

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Canadian housing market on brink of downturn: report

Economist David Madani is reviving a prediction he first made three years ago — that what now appears to be a soft landing for Canada’s real estate market is likely to take a turn for the worse.

Economist David Madani is reviving a prediction he first made three years ago — that what now appears to be a soft landing for Canada’s real estate market is likely to take a turn for the worse. TORONTO STAR FILE PHOTO

By: Susan Pigg Business Reporter, Published on Fri May 16 2014

Canada’s housing market is showing signs of “fraying” with slowdowns and even downturns already impacting some smaller cities and likely to hit still-booming Toronto and Vancouver in time, says Capital Economics.

In fact, economist David Madani is reviving a prediction he first made three years ago — that what now appears to be a soft landing for Canada’s real estate market is likely to take a turn for the worse.

“We still believe that the housing market is overdue for a longer-term correction of as much as 25 per cent,” Madani says in a note to clients released Friday.

“While the recent strength of Canada’s housing market has been astounding, the regional breakdown reveals that it has begun to fray at the edges,” says Madani.

He points as evidence to Canadian Real Estate Association housing statistics for April, released this week, which appear to show a pick up in house sales, but largely on the back of still-booming Toronto and Vancouver, says Madani.

In fact, sales and prices are already falling in Halifax. Regional markets such as Winnipeg and Victoria “are also experiencing a marked housing slowdown, with prices declining in certain areas,” he says.

Madani cites challenging economic conditions, high prices and tougher mortgage lending rules for what he expects to be an escalating downturn.

The most “troubling to the national picture” is Montreal where prices are on the brink of decline, says Madani.

“Despite low interest rates and a stable unemployment rate, it seems clear that the balance of demand and supply is almost as soft as during the recession in 2009.”

What Madani fails to mention, however, is that that market has seen a marked holdback by buyers who had been fearful the province could be severely impacted by the possible election of a separatist government.

Already, realtors are seeing some pickup in sales, especially of high-end properties, which is being attributed, in large part, to the election outcome.

“In contrast, house prices in the two largest and most overvalued markets, Toronto and Vancouver, are holding up for the time being, though partly reflecting fewer new property listings,” he says.

While the current ratio of sales-to-listings in Toronto points to price growth, at least for a few more months, of about five per cent, the picture doesn’t look so rosy in Canada’s priciest market. The sales-to-listings ratio in Vancouver “suggests that house price inflation will decline materially over the next few months.”

“Overall, with house prices already declining in some smaller regions, it may only be a matter of timing then before prices in other larger and much more overvalued markets begin to fall more sharply.”

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23 May

2014

Alycia

Aging workers aren’t giving up on finding work, they’re simply retiring: RBC – Consult with a Vancouver Mortgage Broker

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Aging workers aren’t giving up on finding work, they’re simply retiring: RBC New study shows that the 6.9 per cent unemployment rate is likely not hiding people who have given up on finding work but indicates baby boomers 65 and older are leaving the workforce

OTTAWA—A new Royal Bank analysis suggests the Canada’s labour market is already starting to feel the impact of the aging workforce.

The RBC paper notes that, given soft job growth in the past year and the corresponding decline in the labour participation rate, it is easy — and likely inaccurate — to jump to the conclusion that many Canadians are becoming too discouraged to look for work.

But economist Nathan Jansen says the most likely explanation is just that the baby boomer generation is starting to retire.

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The evidence for such a conclusion is there has been an increase in the number of Canadians classified as not in the workforce.

It turns out that 65 year olds and older are responsible for most of the increase in the not-in-the workforce category — not because they are discouraged but because they have retired, says Jansen.

He points out that back in 2007 Statistics Canada predicted that the participation rate would start to fall sharply going forward because of the aging population, with the decline becoming noticeable in 2011.

If the analysis is true, that is good news for policy-makers because it suggests the country’s current unemployment rate of 6.9 per cent reflects accurately what is going on in the labour force and does not hide a large number of discouraged workers.

But analysts have also warned that as baby boomers retire it will squeeze government budgets with higher costs for services such as health care and fewer workers paying taxes.

Tags: Bruce Coleman, self-employed, Vancouver Mortgage Broker

22 May

2014

Alycia

Toronto tops for speedy home sales: How does your city measure up? – Consult with a Vancouver Mortgage Broker

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Calgary might have the hottest housing market in the country right now, and Vancouver’s might be the priciest, but Toronto is tops when it comes to the speed with which homes are selling.

The homes that sold in the Toronto area last month were on the market for an average of 20 days. Homes that sold in and around Calgary, in contrast, were on the market for an average of 34 days before they sold.

In other markets homes generally take longer to sell. The average number of days on the market for homes in Greater Vancouver that sold in April was 43. Homes in Ottawa are taking an average of 45 days to sell. Edmonton homes were on the market an average of 42 days, in Regina 34 days.

In Montreal, single family homes were taking a whopping 91 days to sell, while condos were taking an average of 113 days.

I’ve gathered this information from local real estate boards in each city. Here’s a bit more detail:

Toronto:

The average number of days that homes were on the market was 20 for both the Greater Toronto Area and in the city itself. But there were variations – for example, it was 14 in Whitby and 44 in New Tecumseh. There are also differences depending on the type of home – detached houses downtown Toronto took an average of 14 days to sell, while condos took 28. Year-to-date for all types of homes in and around the city the average is just 24 days.

Calgary:

Homes are selling faster, but it hasn’t caught up to Toronto. Homes in the area in and around the city were on the market for an average of 34 days before selling last month, while homes in the city itself took 27 days. Year-to-date homes in the Calgary area have taken 33 days to sell, while in the city itself the number is 30 (down from 37 a year earlier). Single family homes in the city itself were on the market for an average of 25 days before selling in April (down from 31 a year earlier), while condos were on the market for 34 days (down from 41).

Ottawa:

Homes were on the market for an average of 45 days before they sold in April. That’s a few days less than the homes that sold in March.

Edmonton:

Edmonton’s homes were on the market for an average of 42 days, an improvement over the 49 days it took them to sell on average a year ago. Year-to-date homes have taken an average of 48 days to sell, down from 55 in the same period during 2013. Condos that sold in April were on the market for an average of 46 days, down from 58 a year earlier. Detached homes were on the market for an average of 38 days, down from 44.

Regina:

Homes that sold in April had been on the market for an average of 34 days, down from 35 a year earlier. They sold at an average of 97.5 per cent of the most recent asking price, compared to 97.2 per cent a year earlier.

Montreal:

Single family homes that sold in April were on the market for an average of 91 days, which was up by 9 days from a year earlier. Condominiums took an average of 113 days to sell, which was up 15 days.

Vancouver:

The average days on the market for homes that sold in Greater Vancouver last month was 43, down from 56 days a year earlier. Year-to-date it has been taking detached homes an average of 47 days to sell and condos an average of 48 days.

“Despite all the hype in markets like Calgary and Vancouver, the GTA is the only real estate market in Canada where houses are selling like hotcakes,” says Eva Blay-Silverberg, a communications professional who has been analysing data in the real estate industry for more than a decade.

Follow Tara Perkins on Twitter: @taraperkins

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21 May

2014

Alycia

Six things to know about real estate deposits – Consult with a Vancouver Mortgage Broker

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When you make an offer on a house you have to put down a deposit. Here are some things to keep in mind.

By: Mark Weisleder Real Estate, Published on Fri May 16 2014

Here are some answers to common questions about deposits when you are buying a house.

When must a deposit be paid?

In Ontario, the standard real estate contract gives the buyer two choices; you can pay the deposit immediately when you make an offer, or you can agree to pay it within twenty four hours after the seller accepts it. Most buyers prefer the second option. If you are in a bidding war, you will be encouraged to come up with the deposit immediately, to show good faith to the seller.

Can the buyer get out of a deal by refusing to pay the deposit?

No. Once the deal is accepted, you can’t change your mind. If you do, the seller can sell the property again and if he gets less money than you were going to pay the seller can sue you for the difference, plus legal fees.

What happens if the deposit is paid late?

The seller has the right to cancel the deal. This is because all time limits matter in a real estate contract and if you are late, even by a few minutes, the seller can try and cancel. I have seen this happen many times, especially when the seller knows that there is another buyer out there who will pay more money. If you need more time to come up with your deposit, say so in your offer.

How much should a buyer pay as a deposit?

This is a tough question, and will largely depend on where your home is located. In Toronto, deposits are now usually up to 5 per cent of the sale price. In Brampton, it is closer to 2 per cent. In some areas of Ontario, deposits can be as little as a few hundred dollars.

Why does the deposit go to the seller’s real estate agent and not the seller?

If the seller goes bankrupt or disappears with the deposit, the buyer is not protected. When the deposit is held by the real estate brokerage, it is in trust and is also protected by insurance so even if the brokerage goes bankrupt, the buyer can get their money back.

If the buyer is unhappy with their home inspection, can the seller refuse to return the deposit?

This happens more than you think. A deposit cannot be released unless both the buyer and seller agree. If a seller believes the buyer did not act in good faith in trying to satisfy their condition, whether it is a home inspection, financing or a condominium status certificate review, they can refuse to release the deposit. This means it stays in the broker’s trust account until a judge decides who gets it, which can take years. As a precaution, buyers should consider making two deposits in their offer, a small one of say one per cent when the offer is accepted, and a second larger deposit once the condition is satisfied.

Understand the rules about deposits before you sign any real estate contract. It is expensive to change your mind later.

More real estate columns by Mark Weisleder

Mark Weisleder is a Toronto real estate lawyer. Contact him atmark@markweisleder.com

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20 May

2014

Alycia

Breaking a closed mortgage can be costly: Ask a Vancouver Mortgage Broker

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You can get a low mortgage rate by signing up for a five-year term. But you could be penalized for an early exit if your plans change.

By: Ellen Roseman On Your Side, Published on Sun May 11 2014

Brian Hyytiainen bought a house and took out a five-year mortgage in 2011. Things have changed in his life, forcing him to put the house up for sale.

“I’m unable to continue to afford the house on my own,” he says. “I’d heard there would be a prepayment fee, but I had no idea the bank would take advantage of an already difficult situation and charge $13,000.”

He was dealing with RBC, Canada’s largest bank, which charged him an interest rate of 3.79 per cent. That was what he saw on the first page of his mortgage agreement.

Only on the third page – in fine print – did he find out that he had received a rate discount of 1.55 per cent.

“Pretty sneaky if you ask me,” he says. “Everyone is given a rate discount. No one would take a closed mortgage at five per cent when rates have been lower for several years.”

Most of the Big Five banks start with a high posted rate and offer discounts to customers who ask for one. It’s a game that has gone on for many years. However, the high posted rate can come back to haunt customers who decide to break a closed mortgage at a time when rates are falling.

Hyytiainen learned how much the inflated rate hurt him after speaking to a client care manager at the branch.

“We calculated the breakage without a discount and it was about $5,000, which is much more reasonable. I tried to challenge the amount.”

RBC client care said there was nothing that could be done. Though he was selling the house because of financial setbacks, he still had to pay the $13,000 penalty when his deal closed.

His appeal to the RBC ombudsman didn’t help. He then filed a complaint with ADR Chambers Banking Ombuds Office (ADRBO), which reviews decisions of participating banks when customers are dissatisfied.

“This has been a frustrating situation,” he says. “I will likely withdraw all my accounts from RBC and tell others about my experience in the hopes they may go elsewhere.”

Mortgage brokers help clients get the best rates from a variety of lenders. Many prefer to use smaller banks that post their best rates and don’t offer discounted rates.

“If you’re going for a fixed-rate mortgage, I’d suggest using a Big Five bank as a last resort,” says Calum Ross, a Toronto mortgage broker.

“As long as the big banks play the rate discount game, consumers will never have fair mortgage lending.”

Luckily, you can find more disclosure than before. Federally regulated banks must show customers how they calculate their mortgage prepayment charges – including rate discounts – using examples that can be easily understood.

However, the banks’ calculators include lots of numbers and technical terms – and don’t always provide a definitive answer.

“Note: This example is based on a formula for estimating the cost of prepaying a mortgage before the end of the term,” says RBC’s website.

“RBC Royal Bank uses a more complex calculation that will result in a lower charge than the estimate. You will have to contact us for your exact prepayment charge.”

How can you avoid getting hit with a mortgage prepayment charge that eats up your home equity when you sell?

Here are some tips:

Did you receive a rate discount? You may not see it shown prominently on your mortgage documents. Ask the bank how much the discount was and how it will be used in the calculation.

Have you used your prepayment privileges? The bank should deduct the prepayments you are allowed to make each year from the balance on which the penalty is calculated. Speak up if this is not done.

Do you need help figuring out the penalty or negotiating a lower one? Consult a mortgage broker with the Accredited Mortgage Professional (AMP) credential. Mortgage brokers can run the numbers at no cost and help you find a way to cut the cost.

Can you weight the costs and benefits of breaking your mortgage? Check the Financial Consumer Agency of Canada’s online guide to renewing and renegotiating your mortgage.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or www.ellenroseman.com

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19 May

2014

Alycia

Home prices showing ‘early signs of accelerating’ – Consult with a Vancouver Mortgage Broker

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The Globe’s new Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter, Tara Perkins, and others. Read more on The Globe’s housing page and follow Tara on Twitter @TaraPerkins.

Canadian home prices appear to be picking up a little steam.

The gains come even after a sluggish winter for home sales, and forecasts from a number of economists for price growth to peter out.

Teranet-National Bank’s house price index, which tracks 11 cities, hit an all-time high in April, with prices rising 0.5 per cent from March and 4.9 per cent from a year earlier.

“Home prices are starting to show early signs of accelerating – even when adjusting for quality,” Toronto-Dominion Bank economist Diana Petramala wrote in a research note after the numbers came out, saying prices have maintained more momentum this year than TD economists anticipated.

“We continue to believe that home price growth will moderate in the second half of 2014,” she added.

In the meantime, Royal Bank of Canada economist Robert Hogue says that prices are rising faster than incomes. And if the current pace of price growth keeps up, that could be problematic. “This is starting to get uncomfortable, because it’s going to affect affordability,” he told me.

It’s not going to become an issue immediately. Declines in mortgage rates in recent months have helped to offset price gains when it comes to affordability, he points out. “But at some point interest rates are going to start moving up.”

“With home prices already estimated to be 10 per cent overvalued, the risk is for more froth to gather in the Canadian housing market,” Ms. Petramala wrote.

Digging into the numbers, there is a wide variation between markets. Some, such as Winnipeg, Toronto, Calgary and Vancouver, saw prices hit new highs in April. Others saw prices fall. Here’s how the markets fared, first from the prior month, and then from a year earlier:

Calgary: 1.5 per cent, 10 per cent
Edmonton: 0.6 per cent, 4 per cent
Halifax: 0.7 per cent, –3.5 per cent
Hamilton: 0.7 per cent, 5.3 per cent
Montreal: 0.8 per cent, –0.4 per cent
Ottawa: 0.7 per cent, –0.4 per cent
Quebec City: –0.5 per cent, –2.4 per cent
Toronto: 0.3 per cent, 5.8 per cent
Vancouver: 0.5 per cent, 9 per cent
Victoria: –1 per cent, –0.7 per cent
Winnipeg: 0.4 per cent, 2.5 per cent

It’s the first time since October 2010 that prices were down year-over-year in five markets, and it’s the third-weakest gain in prices for the month of April since 1999, outside of a recession. But it’s still stronger than many economists expected.

“Lack of homes for sale in many of Canada’s major markets appears to be a key reason for mounting price pressures,” Ms. Petramala wrote.

The cities with the sharpest price growth – Vancouver, Calgary and Toronto – are currently seller’s markets, while those where prices are falling are buyer’s markets, she said. “Following many years of rampant new home construction, Montreal, Quebec City and Ottawa are currently grappling with an inventory overhang of condos on the market,” she added.

Follow Tara Perkins on Twitter: @taraperkins

Tags: Bruce Coleman, self-employed, Vancouver Mortgage Broker

15 May

2014

Alycia

Canada’s million-dollar housing markets: Look out Vancouver, Toronto’s moving in – As a Vancouver Mortgage Broker

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Toronto is on the verge of becoming the second Canadian city where the average price of a detached home hits the $1-million mark.

“We went over that mark a few years ago in Vancouver and now we are going to hit it in Toronto. It’s not inexpensive to own a house in the city of Toronto,” Brookfield Real Estate Services Inc. president Phil Soper said Tuesday after the the company’s annual general meeting.

The Toronto Real Estate Board released its results for April sales Tuesday and those results show increased pressure on the single family portion of the resale housing market, pushing prices in the old City of Toronto close to $1-million for a detached piece of property.

TREB said there were 4,878 detached home transactions across the city proper last month and the average price jumped to $965,670, a 13.2% increase from the average sale price for the same month a year ago. The average price of a semi-detached home reached $702,332 in the city, an 18% increase from a year ago.

Developers have long complained about government land use policies they maintain have restricted construction and created the widest gap between high-rise condominiums and single family homes in Toronto history.

“Price growth for the GTA as a whole was driven by the single-detached, semi-detached and townhouse market segments in the City of Toronto. So far this year, there has been no relief on the listings front for these home types in many neighbourhoods in Toronto and surrounding regions,” said Jason Mercer, senior manager of market analysis with TREB. “Until we see a marked and sustained increase in listings, we should expect to see the annual rate of price growth above the long-term norm.”

Toronto would just be entering lofty territory Vancouver has long occupied. The Real Estate Board of Greater Vancouver said this month the average detached home in the city sold for $1,198,828 in April.

Even in Toronto’s 905 belt, the average sale price of a detached home reached $645,179 in April, a 9.6% increase from a year ago. By comparison a condominium apartment in Toronto’s suburbs had an average sale price of $296,078.

Mr. Soper, who is also chief executive of Brookfield’s Royal LePage brand, told shareholders at its AGM that the first quarter of this year was soft because of a winter that was unprecedented in terms of its impact on the Canadian market as a whole.

“The market came roaring back to life in the later weeks of the quarter and April was a very strong month,” said Mr. Soper.

Brookfield is mostly shielded from the cyclical nature of the real estate market as 71% of its income comes from fixed contracts with brokers. The other 29% comes from a variable royalty stream.

“There was a downturn that lasted from the middle of 2012 to the middle of 2013. While home prices were not affected by the downturn, we did see double digit declines in volumes of homes sales during that downturn,” said Mr. Soper.

Over the past 35 years though, the real estate industry shows a compound growth rate of 9.7% annually with about half of it coming from volume and half of it coming from price.

Brookfield itself is increasing its dividend to $1.20 per share in 2014 after three years of it being stuck at $1.10 which Mr. Soper said was partially due to taxation resulting from the company’s conversion to a corporation from an income trust. twitter.come/dustywallet

14 May

2014

Alycia

Homebuilding rebounds quicker than expected with 35% jump in condos and apartments – Consult with a Vancouver Mortgage Broker

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TORONTO — New home construction in Canada picked up in April, shaking off the effects of this year’s harsh winter, though economists still expect activity to cool gradually in 2014.

The seasonally adjusted annualized rate of housing starts rose to 194,809 last month from 156,592 units in March, data from the Canada Mortgage and Housing Corp showed on Thursday.

That surpassed analysts’ expectations for a gain to 175,000.
March’s housing starts were revised slightly lower from the 156,823 reported initially.

The volatile figure for multiple-dwelling urban starts surged 35.1% to 117,612 units, while single-detached urban starts rose 6.5% to 59,180 units.

“A bounce-back in new home construction activity in April had been expected following the sharp outsized drop in the previous month that likely reflected the negative, though transitory, impact of lingering severe winter weather,” Laura Cooper, economist at RBC, wrote in a note.

RBC forecasts starts will slow to an overall pace of 181,000 this year from 2013’s 188,000.

Canada escaped the U.S. housing crash that accompanied the 2008-09 financial crisis, and home prices have risen sharply, if not steadily, over the past five years.

Indeed, separate data on Thursday showed the price of new homes rose 0.2% in March, in line with expectations.

While some economists have predicted the Canadian market will crash, most have said they expect sales and new construction to level off in 2014 and 2015 as mortgage rates rise, with prices continuing to tick slowly higher.

“Looking through the recent volatility in housing starts shows that Canadian homebuilding activity is stable and running at levels supported by demographic demand,” BMO Capital Markets senior economist Robert Kavcic wrote in a note.

Aside from weather disruptions and a spike in condo projects breaking ground in early 2012, starts have held within a stable 175,000 to 200,000 range since about the end of 2009, Kavcic said.
“In other words, homebuilders have been, and remain, quite well behaved.”

Year-on-year, new-home prices nationwide were up 1.6%, data from Statistics Canada showed, within the 1 to 2% range registered over the previous year.

Prices were unchanged in 11 of the 21 urban areas surveyed, up in five and down in five. Prices were flat in the Toronto-Oshawa region and in Montreal, while they fell by 0.1% and 0.2% in Vancouver and Victoria, respectively.

The Canadian government, which has intervened in the mortgage market several times since 2008 to cool the sector, has long warned that the combination of high housing prices and heavily indebted Canadians could trigger widespread defaults in the case of an economic shock. But officials now expect the market to stabilize gradually.

The new housing price index excludes condominiums, which the government has said have been a particular cause for concern.
© Thomson Reuters 2014

13 May

2014

Alycia

Canada’s next housing bubble: real estate agents – Consult with a Vancouver Mortgage Broker

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The housing boom has not only resulted in record real estate prices, it has spawned an unprecedented number of realtors.

The number of people selling real estate reached 108,706 during the first quarter of the year, according to the Canadian Real Estate Association. To put it another way, that’s one realtor for every 245 Canadians over the age of 19.

Canada’s million-dollar housing markets: Look out Vancouver, Toronto’s moving in

Toronto is on the verge of becoming the second Canadian city where the average price of a detached home hits the $1-million mark. <em>Keep reading.

No where is the bubble in agents more apparent than Toronto, perhaps the hottest market in the country for property. The Toronto Real Estate Board wouldn’t provide an exact number for its members but TREB’s boiler plate statement this month said it had reached more than 39,000 — or about one for every 140 people in the Greater Toronto Area.

Just over a year ago in December, 2012, that number was 35,000. That number grew from 31,000 a year earlier. TREB had about 20,000 members a decade ago.

We have almost as many people selling houses as making them. Statistics Canada said in its labour force survey for the year 2013, there were 131,000 carpenters. There are only 202,200 cooks in Canada.

You do two deals and you make $50,000

So what’s going on? Much of it is an influx of speculative careers from would-be real estate agents who see a quick buck to be made because they know someone selling their house and they want to get the listing and the fat commission — up to 5% of the house price — that comes with it.

“You’ve got some nice person making $30,000 or $40,000 as a receptionist. This is the American dream. You do two deals and you make $50,000,” says Lawrence Dale, a long-time thorn in the side of both CREA and TREB having sued both.

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There is no data on commission rates but the general rule in Ontario is 5% of the sale price is split by two realtors on a deal while other provinces have a sliding scale where the percentage increases at higher amounts.

Toronto prices are soaring, especially single family homes. TREB reported this past week that average single detached home in Toronto sold for $965,670 last month, a 13.2% increase from a year ago. At $1-million, there’s $50,000 to be split by realtors.

OREA says the average student takes about 11 months to complete the course although they have up to 18 months after they start. Once registered with RECO, students have two years to complete the articling segment of the training program with a broker. The total program costs about $3,180 but that just makes you a salesperson and not a broker.

“We see a very diverse mix in our classes. They’re made of a combination of high school graduates, folks at university doing it on the side, retirees and a diverse mix in terms of cultural background,” says Shelley Koral, director of the OREA College.

Tim Fraser for National PostPhil Soper, chief executive of one the largest real estate companies in the country, Royal LePage Real Estate Services Inc., says there has been a rise in what he calls “the speculative” agent.

But Phil Soper, chief executive of one the largest real estate companies in the country, Royal LePage Real Estate Services Inc., says there has been a rise in what he calls “the speculative” agent.

“This is a real regional story. If you look at Quebec, where they took a different approach to licensing and professionalism by increasing the length of time and difficulty to get your licence, their ranks have shrunk,” says Mr. Soper, who said at his parent corporation’s annual general meeting this month he wasn’t interested in adding agents just doing one-off deals.

Changes dictated by the Competition Bureau have made it easier to access the Multiple Listing Service where about 90% of transactions take place. Some boards have been flooded with people ready to offer discount deals because they have access to that information.

“You’ve got speculative agents who get their licence on the chance they might be able to sell a home,” says Mr. Soper.

You still have to work under the licence of a brokerage in Ontario but he says “licence warehouses” have been created in the industry where sales people doing a deal or two can quickly join.

“They are really only brokerages in name only,” says Mr. Soper. “They have hundreds or thousands of people, there is no training, there is no management.”

Doug Porter, chief economist with Bank of Montreal, says the rise in realtors, doesn’t surprise him considering the strength of the housing market.

“There’s the pull that home sales have been strong and prices on a tear. The push has been the underlying job market has improved but it’s weaker than when the recession began,” he said.

The benefit of all these realtors jumping into the market is negligible, when it comes to adding to gross domestic product. “It adds only modestly,” said Mr. Porter.

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