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Realtors realize more
Real estate fee revenue up 8.1% to10.6 billion
Real estate agents, brokers, appraisers and other real-estate industries reported total operating revenues of $10.6 billion for 2006, an 8.1 per cent increase from 2005. Statistics Canada says high demand for real estate has boosted both sales and prices despite a slight increase in mortgage rates. The agency's New Housing Price Index grew 9.7 per cent in 2006, close to five times the rate of inflation. With a 37 per cent increase in operating revenues, Alberta's real-estate market continued to lead national growth. Manitoba also recorded double-digit annual growth, at 19 per cent. The offices of agents and brokers generated 87 per cent of the country's total real-estate revenue.
Royal LePage profits up 44%
Brookfield Real Estate Services Fund, a major property brokerage services company that operates through the Royal LePage and other brands, reported its first quarter net profits rose to nearly $1.3 million from $912,000 last year as the company benefited from a robust home selling market that is now starting to moderate. The Toronto-based fund said yesterday it earned 13 cents a unit for the three months ended March 31, up 44 per cent from $912,000 or nine cents a unit for the first quarter of 2007. Royalty revenue rose to nearly $8.1 million from $6.9 million as the company expanded its Royal LePage and La Capitale network by more than 14 per cent.
May 7, 2008 in Canadian Real Estate Market | Permalink
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Comments
Please, MLS have to be open service for everybody who wants to pay for it.
Posted by: Mike | May 8, 2008 2:35:06 AM
Couldn't agree more with the statements below. As a first-time home buyer who's just getting up to speed on the unique "characteristics" (large commissions, deliberate attempts to create bidding wars etc) of the home-buying process I'm amazed at that there hasn't been a huge crackdown and opening up of MLS.
One can argue that they can earn their money on the sell-side but on the buy side it's downright ridiculous that one is paying 2.5% of the sale price to the agent for them to pull up data that should be publicly available!
The only people who continue to benefit from rapidly appreciating house prices year after year are the agents!
Posted by: Unknown | May 7, 2008 10:43:10 PM
absolutely agree with the previous two comments. Discount brokerages like Realtysellers were forced out of business to protect the monopoly that exists, which in turn protects commissions. Unfortunately, there is not enough momentum in the FSBO area to fuel widespread industry reform.
In a tough market, I can see how an agent may have to work hard for their paycheque... however, in today's still hot market (at least in downtown Toronto), how difficult is it to hire a someone to stage a house, list it at some ridiculous low price to attract attention, hold-back offers for a week, then sell to the highest bidder? Certainly not worth 5% at today's prices...
Posted by: | May 7, 2008 7:18:12 PM
Amen. Great comment by unknown, May7, 1:19 pm.
open up the system and get rid of the monopoly. RE agents should have gone the way of the travel agent by now.
Posted by: Toronto Bear. | May 7, 2008 3:42:19 PM
Ever wonder why real estate commissions have remained so high even as property values increased? 10 years ago, average house prices were less than half of what they are now! Commissions have stayed about 2.5% for either side. That's 5% from the seller. Even as the Internet has revolutionized every other business in this world (like discount brokerages), real estate brokerages seem to have kept up their commissions. You would think that somehow the Internet would force competition and reduce the commissions charged. Nope! The main reason is because of the unnatural monopoly that the gov't is helping maintain for the real estate associations. That's right, the MLS database. If that database were open to competition, you'd see commissions drop so fast! There's no reason why a seller should be paying $25K in commissions to sell an average house around $500K in Toronto. An average house around $250K 10 years ago would've cost the seller $12.5K. Did an agent work any harder now then he did 10 years ago to get a doubling of commissions? I don't think so. Also, commissions should not be a fixed percentage of the house value.
One of the reasons you see so many barely educated people in real estate is because the barriers are next to nil. Have you read half the property descriptions on MLS? Most agents can't even put together sentences to save their lives! I think if you can use the MLS for comparison purposes, most savvy people can broker their own deal. Really, MOST real estate agents are glorified paper pushers! Anyone can sit in an open house, anyone can drive themselves to an open house, most people can do their own comparisons given the MLS. Did I leave anything out? Of course, the only real person you need is a real estate lawyer to look over the contract and legalize the property transfer. Otherwise, the entire job is a piece of cake if you ask me. I did it myself!
Posted by: | May 7, 2008 1:19:11 PM
