Thousands of independent Canadian real estate agents who battle daily for clients cannot fathom why the competition watchdog believes the industry is “anti-competitive,” says the head of one of Canada’s largest brokerages.
Philip Soper, president of Royal LePage, says many of his agents are confused about why the federal Competition Bureau continues to bemoan a lack of choice even after the industry voted to introduce more service flexibility.
“(The realtors) feel that they live in a hyper-competitive industry where they have to fight for every piece of business,” he said in an interview Tuesday.
“What they see is heavy competition day after day, and so when an official body states they believe there isn’t competition, they find that disturbing and they can’t understand why.”
The Canadian Real Estate Association, which represents about 98,000 realtors, loosened its rules Monday to lift restrictions on realtors’ minimum service requirements and allow consumers to use an agent to simply list their property and handle the details on their own.
But the Competition Bureau rejected those changes saying they do not create more choice for home buyers and sellers, and instead give realtors a “blank cheque” to impose new anti-competitive rules.
The bureau said it will continue to pursue an application filed with the Competition Tribunal in February seeking to strike down CREA’s rules on the use of its Multiple Listings Service, which it has said restrict consumers’ ability to conduct real estate transactions without an agent.
Soper said the changes to the association’s rules to give agents more flexibility to offer “a la carte” services, will prompt an increase in the number of discount brokerages working for a low fee to post a listing for a consumer.
CREA allows only its members to post homes for sale on its MLS database, which is operated by regional real estate boards and where the vast majority of homes in Canada are sold. But Soper said even if the data available on the MLS system was opened to consumers, the industry wouldn’t change dramatically.
“There are many low priced alternatives already competing for the price sensitive portion of the market, so I don’t think rule changes will result in a big shift in the way real estate services are offered in Canada.”
Soper said it wouldn’t be any more complicated than using websites like Kijiji or Craigslist for a homeowner to list a home themselves, but added privacy would be a major concern.
“By far and away the majority of people pay a realtor to act as a screen in order to weed out serious offers from tire kickers or worse, people who are just trying to sell you something.”
Royal LePage is controlled by the Brookfield Real Estate Services Fund (TSX:BRE.UN), which also operates under the name La Capitale Real Estate Network in Quebec and the Johnston & Daniel banner in Toronto.
Units in the fund were down 14 cents at $13.24 on the Toronto Stock Exchange on Tuesday.