John Morisy
Province
Easier access to the Multiple Listing Service could negate the impact of mortgage-rule changes currently under debate to cool the country’s overheated housing market, Scotia Economics said Thursday.
“Indeed, the potential is there for home-buying conditions to actually become easier over the next one to two years via sharply lower average commission rates that are more in keeping with choices south of the border,” said its note, written by economists Derek Holt and Karen Cordes.
Holt and Cordes argue that the savings from reduced real-estate commissions could be substantial, and could make up a large part of the difference on a down payment if it is changed from a five-per-cent minimum to a 10-per-cent minimum.
For example, a typical five-per-cent commission paid against the average resale price of $345,000 would result in a commission of $17,250. The same home sold at rates offered by the still-tiny discount-broker segment would result in a commission of $1,500, a difference of $15,750.
“Thus, through the interplay between potential shifts in mortgage rules and the Competition Bureau’s challenge, Ottawa is likely to at worst leave buying incentives on neutral terms, or could even instead drive even more stimulative terms, given a low probability of changes to mortgages rules.”
Wednesday, the Canadian Real Estate Association announced it would ask its members to bow to pressure from the Competition Bureau of Canada to allow easier and possibly cheaper access to the Multiple Listing Service.
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