‘Decisive victory for competition’: Supreme Court won’t hear TREB appeal in real estate data case

other

The Supreme Court of Canada announced today that it won’t hear the Toronto Real Estate Board’s (TREB) appeal of a 2016 Competition Tribunal decision. (https://rem.ax/2NfpeHZ) In that decision, the Tribunal ruled that certain aspects of TREB’s Virtual Office Website Policy constitutes an abuse of dominant position under the federal Competition Act.

TREB has 60 days to comply with the Tribunal’s order.

Here is TREB’s statement on this development:

“TREB RESPONDS TO  SUPREME COURT OF CANADA’S DECISION

TORONTO, ONTARIO, August 23, 2018 – The Toronto Real Estate Board respects the Supreme Court of Canada’s decision to not grant leave to hear TREB’s appeal.  The Order of the Tribunal will come into effect in 60 days time, unless it is modified. 

As noted by the Supreme Court of Canada, of the approximately 600 leave applications submitted to the Court each year, only about 80 are granted.  The possibility of succeeding in getting an appeal heard is in general remote. The Court’s role is not to correct errors that may have been made in the courts below. Rather it grants leave only where its decision is likely to have an impact on society as a whole. 

TREB believes personal financial information of home buyers and sellers must continue to be safely used and disclosed in a manner that respects privacy interests and will be studying the required next steps to ensure such information will be protected in compliance with the Tribunal Order once that comes into effect. –John DiMichele, CEO, Toronto Real Estate Board”

“Now that the Supreme Court has ruled on this matter, we’re working with our legal counsel to understand the potential implications,” Phil Moore, Board president said. “As always, we want to ensure we’re meeting any legal responsibilities we have and acting in the best interests of our members and the home buyers and sellers you represent every day.”

Hunter at Lynn Creek designed to reflect North Shore location

Mary Frances Hill
The Province

Hunter at Lynn Creek

What: A total of 326 units in two concrete towers of 27 and 16 storeys

Where: 1401 Hunter St., North Vancouver

Residence sizes and prices: From studios less than 500 square feet to three-bedroom suites and townhouses of more than 1,500 square; from mid $500,000s

Developer and builder: Intergulf Development Group

Sales centre: 481 Mountain Highway, North Vancouver

Hours: Noon to 5 p.m., Sat — Thurs

The interior spaces of the Hunter at Lynn Creek new-home project were designed to reflect the beauty of the development’s North Shore surroundings.

When Marion Nordin and Area3 Design Studio took on the interiors of Hunter at Lynn Creek, Intergulf’s new residential community in North Vancouver, they were determined to offer homes made in high-end resilient materials that would remind homeowners of the beauty of their North Shore surroundings.

“We chose the finishes to reflect the fact that you are on the North Shore,” Nordin says. In the kitchens, Nordin and her colleagues used natural materials that are as hardy as they are attractive.

“We chose natural stone-looking tile for the kitchen backsplash — quite beautiful but much easier to maintain than real marble,” she says.

The best kitchens allow a cook to work with a sense of comfort and efficiency, and Nordin says Fisher and Paykel appliances help fulfill that need, combining “good looks with functionality.”

“They are European in feel, and do not overpower the kitchen.”

Hunter at Lynn Creek sits on a 2.1-acre parcel and comprises two towers, one 27 storeys and the other 16.

Indoors, homeowners will enjoy wide-plank laminate flooring in the main living areas, plush carpeting in bedrooms and eight-foot-eight-inch-high ceilings, while the townhomes and penthouses will have overheight ceilings.

The District of North Vancouver is giving the neighbourhood a “refresh” of sorts, and Hunter at Lynn Creek will be part of a long-term revitalization that will see enhancements to nearby parks, making them more amenable to public use.

Homeowners in both towers will eventually be able to enjoy new biking and hiking trails nearby. Anticipating these improvements, Intergulf will offer colour palettes named, appropriately enough, “Mountain” and “Creek”. Renderings show a grand open- concept dining room, living room and kitchen graced with oversized windows. Nordin says the kitchens may have been the most enjoyable rooms to work on.

Her favourite part of the homes? “In the larger kitchens…the pantry storage wall and open shelving.”

One of four principals at Area3, Nordin grew up in a creative family: her father was a custom furniture maker and a home remodeller.

Now with more than 19 years of experience as an interior designer of multi-family and private residential projects, she says she brings the fruits of that experience to her work at Hunter at Lynn Creek. “I think that the knowledge I have from the variety of projects in my past allows me to be more creative in my current work.”

© 2018 Postmedia Network Inc.

Home evaluations can be bought

Tina Plett
REM

Real estate is this weird industry where people expect highly trained professionals to work for free (or less).  It’s not just family and friends either, like you might experience in your job – it’s this broad expectation from all of society – bankers, lawyers, buyers, sellers – that real estate agents can and should work for free.

For over seven years, I was that Realtor, getting the call for a free home evaluation. (thank you, Mr. Banker, sir. May I have another?)  I’d eagerly take the call, invest the hours, drive all over tarnation and tromp through snow and mud – and all for free. It took me a while to realize I don’t actually have to do that to myself.

In fairness, free home evaluations are a valid way of drumming up business.  It was a great way to meet people who were interested in buying or selling houses and start a conversation about their needs and how we can help. We could even demonstrate how reliable and effective we were before asking to represent them.

Things have changed. (They always do)

What was once unique and creative is now commonplace. That means a few things:

• It’s so common it’s actually an expectation. Why pay when you can get the milk for free? It makes a person wonder if it undermines the level of professionalism Realtors could otherwise be known for. If Realtors were a house on a city block, would their being free make them the cheaper house, or the high-value, more desirable house, for example? Something to think about.
• People who have representation will still use another agent’s free home evaluation offer. Why? Because they don’t want to “bother” their own agent who they’re paying. It’s more courteous to make some other random agent work for free for no benefit. I know it doesn’t make sense. I also know it makes no dollars.
• Marketing is about standing out. Doing what is common does not stand out. I’m learning that the more I do things others don’t, the more I set myself apart. (Blogging, going mobile (instead of the brick-and-mortar office, offering 3D Virtual Tours of my listings, professional photos – oh, the number of people who don’t do that, but really, really should – and charging for home evaluations) all get more attention for my listings. Which is kind of the point, no?

I’ve learned my lesson. I will not work for free for strangers for no benefit. I’ll work like a Clydesdale for my clients though, and it’s for them I reserve my resources, energy and time. To give it away to anyone else is to take it away from them. Priorities, you know?

A few other reasons I don’t offer free evaluations to any Joe Blow are:

Clients like it.

I can’t tell you how often people have called me up asking for a straight-up evaluation.

“I’m calling you because you’re known to be professional,” they’ll say.

“I want a home evaluation, but plan to sell privately. Can I just pay you for the evaluation and not have to have the conversation about representation?”

The answer is yes. They respect my time, and I respect their needs. It’s an awesome arrangement. And often that speaks to my professionalism more than offering the service for free.  (Counter-intuitive, I know, but it works)

I don’t work for the bank or the mortgage broker.

When they send people to take advantage of me, (er, I mean use my services for free), they get paid, their clients get a mortgage and I get nothing. It puts no food on my table. No, sorry. I do not work for the bank. (Not at those prices!)

I’m not new at this.

I’ve invested thousands of dollars in my professional training to become the best at what I do. My multiple specialist certifications came at a price. My edgy technology and professional team members come at a cost. And my years of experience are priceless.

None of this is offered by a new kid on the block. It’s unreasonable to expect I’d work for newbie wages. (Would you?) And the adage is true – you do get what you pay for. That’s why I pay, and why you should too.

To raise the perception of our industry.

Real estate agents are professionals. We are resented for our seemingly large commissions, we’re presumed to be rich and are expected to work for free as penance. (Just ask the stranger who asked me for thousands of dollars out of the blue.) It’s an unfortunate and unjust perception. By charging for my professional time and service, I hope to communicate the respectability of being a Realtor. It is a profession, and one that ought rightly to be paid for.

I have no grand notions of changing the industry single-handedly. Free evaluations have always been done and they’ll continue to be done. And, especially in the beginning when one is eager to connect with people and get their face and name out there, it can still be a viable prospecting method. But I do think there comes a time when a person needs to shed old ideas and embrace new ones.

© 2017 REM Real Estate Magazine

Supreme Court refuses to hear TREB’s appeal in real estate data publication case

REM

The Supreme Court of Canada will not hear the Toronto Real Estate Board’s appeal of the decision to uphold the Competition Tribunal’s ruling that the board, by not including sold and other data in its virtual office website (VOW) feed, had engaged in anti-competitive acts.

The decision means that the tribunal’s order of June 2016 stands. TREB must provide VOW feeds with all of the “disputed data”, which includes “archived data, with respect to sold and pending sold homes, withdrawn, expired, suspended or terminated listings and offers of commission to brokers who represent the successful home purchaser,” according to the order.

The board can “not preclude or restrict its members’ use of the information in the VOW Data Feed on any device (including but not restricted to computers, tablets or smartphones), but TREB may limit members’ use to being directly related to the business of providing residential real estate brokerage services.”

Some brokerages say they will begin providing the information to clients immediately.

“The Toronto Real Estate Board respects the Supreme Court of Canada’s decision to not grant leave to hear TREB’s appeal,” says TREB CEO John DiMichele in a statement. “The order of the tribunal will come into effect in 60 days time, unless it is modified. As noted by the Supreme Court of Canada, of the approximately 600 leave applications submitted to the court each year, only about 80 are granted.  The possibility of succeeding in getting an appeal heard is in general remote. The court’s role is not to correct errors that may have been made in the courts below. Rather it grants leave only where its decision is likely to have an impact on society as a whole.

“TREB believes personal financial information of home buyers and sellers must continue to be safely used and disclosed in a manner that respects privacy interests and will be studying the required next steps to ensure such information will be protected in compliance with the tribunal order once that comes into effect,” says DiMichele.

TREB has consistently argued that releasing the information violates client’s privacy rights and its own copyright of the information. But the Competition Bureau maintained that the board wanted to control the information available, to the detriment of brokerages that wanted to explore innovative business models and provide more data to the public.

“Today’s ruling is a decisive victory for competition, innovation and for consumers. By removing TREB’s anti-competitive restrictions, home buyers and sellers in the GTA will now have greater access to information and innovative real estate services when making one of the most significant financial decisions of their lives,” says Matthew Boswell, interim commissioner of competition, in a statement.

The dispute between TREB and the Competition Bureau dates to 2011.

© 2017 REM Real Estate Magazine

Canadian residential real estate is the 3rd most overvalued worldwide

Ephraim Vecina
REP

Canadian residential real estate is the 3rd most overvalued worldwide, according to a new global price analysis by The Economist.

Trailing just behind New Zealand and Australia, Canada’s homes are estimated to be 56% more expensive than they should be.

The study measured the average housing price against the median household incomes of 22 major global markets, and Vancouver was the only Canadian city to be ranked in this overvaluation leaderboard, coming just behind Hong Kong, Auckland, Paris, and Brussels.

Vancouver real estate was priced 65% higher than it should be based on local incomes, according to the study. Average home prices in the city increased by around 12.3% per year since 2011, and by 60.4% over a 5-year period.

In recent years, strong price growth and increased foreign capital volume have turned Vancouver’s real estate segment into a major contributor to the B.C. economy.

However, a FINTRAC report released earlier this year warned that B.C. properties are especially vulnerable to money laundering.

The study found that approximately 88% of real estate entities in the province have “significant” and “very significant” deficiencies in their anti-money laundering controls, particularly in risk assessment, client identification, record keeping, and reporting policies and procedures.

FINTRAC said that it was paying close attention to money laundering via real estate, alleging that funds gained from these operations are used by criminal elements engaged in the fentanyl trade and other illicit activities.

Widespread property speculation and foreign nationals have been blamed for the inflamed growth of Vancouver’s home prices.

Copyright © 2018 Key Media Pty Ltd

Speculation tax under fire from municipalities

Steve Randall
Canadian Real Estate Wealth

An annual conference of municipalities in British Columbia has called for changes to the province’s real estate speculation tax.

Union of B.C. Municipalities delegates are asking the provincial government for more control over how the tax is applied which could make its implementation optional for local officials or enable them to introduce their own versions of the tax.

The tax is due to take effect from 2019 with homeowners in six BC districts or municipalities taxed between 0.5% and 2% of the property’s assessed value if they are not its permanent residents or it is not rented out long-term.

“We recognize the government’s goals in the speculation tax, making sure that there is housing availability by reducing the number of empty or vacant homes, and also the need to deal with the affordability issue,” Oak Bay Mayor Nils Jensen told the Vancouver Sun. “We felt that should be done by allowing local governments who know their own communities to determine how best to achieve these goals.”

Lack of consultation Along with Oak Bay, resolutions by Langford, CRD, Nanaimo, and Lower Mainland Local Govt Association are asking for opting out, postponement or changes to the Speculation Tax.

Victoria Residential Builders’ Association says this reveals “the province’s lack of consultation and poor policy development.”

Copyright © 2018 Key Media Pty Ltd

Interest-only mortgages provide lower monthly payments

Neil Sharma
Canadian Real Estate Wealth

Investing in real estate can be tricky in a rising rate environment, but interest-only mortgages with term are helping stabilize cash flow.

“It’s the most innovative product that has come through the mortgage market for the last seven years,” said Jacques du Preez, principal broker and owner of Mortgage Allies. “Because of the new rental laws, you can’t just increase the rent on tenants, but at the same time you want to make sure your costs are stable. What turns a lot of people off is having a line of credit on a rental property because as time goes on, payments go up, so cash flow gets pressurized.”

du Preez likened the fixed-term rates on interest-only mortgages to variable rates, but without the risk of rising primes. He secured a 4.3% interest-only mortgage for a real estate investor client who locked it in for five years.

“They have a low payment, and that is fixed for five years,” he said. “If at any time they want to lock that in, they can lock it into a P&I [Principal and interest]. Variables are not good for rentals because it can impact the cash flow over time as the prime increases, but here the cash flow is sure for the next five years.”

Borrowers can also break the mortgage whenever they like with very little penalties.

“The client is king here,” said du Preez. “After two years, if the client decides to do something else, they can cancel the mortgage with very little penalties. They really are king.”

The interest-only flex mortgage has been on offer at Merix Financial for the past couple of months, and its reception has been resoundingly positive, according to the lender.

“The interest-only flex is all about providing clients lower monthly payments that allow them to free up cash flow for other purposes,” said Jill Paish, Merix’s executive vice president of broker experience. “We felt there was a real need for that type of mortgage for a variety of reasons. With the tightening rules and the way real estate prices are going, a lot of times clients can’t afford the monthly carrying costs, and the monthly costs are higher than they’d like to live in a desired marketplace.”

Merix has noticed many borrowers who have opted to take the interest-only mortgage are investing in real estate.

“We’re finding it’s being used by people who want to invest,” said Paish. “They’re taking a lower interest rate on their mortgage and using cash flow from that investment for a savings nest. We’re also finding that it’s popular with people who have various lifestyles, like cyclical income or a lot of overtime, and just want to make lower payments. When they have more money, they’ll pay a lump sum towards their mortgage.”

Copyright © 2018 Key Media Pty Ltd

Keep Family and business separate

Ross Wilson
REM

In the last of this three-column series about working with family and close friends, let’s delve a little into boundaries.

Many of you (but sadly, not all) would agree that it’s arguably in poor taste to blatantly prospect at family gatherings. However, during such events, if a relative seeks your advice, and you’re open to helping them, prior to accepting the agency, clarify your policy of no discounts. If they grumble, save everyone a lot of time and frustration by politely refusing their business right then and there. The personal relationship must come first. By treating your business relationships with family professionally, you’ll improve the odds of keeping the personal element intact.

Early in a relationship with stranger clients, you normally delineate mutually unambiguous boundaries as determined by personal feelings and social and business mores. Since boundaries with family can naturally be blurred, it’s best to establish similar clear limitations, professional boundaries and expectations before entering into a principle/agent contract with loved ones.

Don’t wait until a perceived transgression occurs and someone is upset, either expressed or suppressed.  Obviously, all industry rules, codes of ethics, standards of practice and provincial statutes still apply, but a healthy working relationship is more than that. A personal connection is great, but to avoid damaging a familial relationship, it’s really important for both sides – prior to putting pen to paper – to recognize what would constitute inappropriate behaviour, unreasonable expectations and unwelcome trespass.

In your business life, disappointments will be forgiven or forgotten fairly quickly. Aggrieved clients will vote with their feet and never do business with you again. They’re completely gone from your life.

However, family will always be family. You can’t divorce a sibling. When boundaries or expectations are not clearly understood or reciprocally respected, the result could ultimately be disastrous. For example, prior to accepting a family member as a client, your professional availability should be established. Advise them that unless it’s an emergency – by your definition – they may contact you with business questions or concerns only during regular business hours. Or you could insist that when you have a report ready, you’ll contact them.

Treat all your clients, be they family, friend or stranger, in the same professional manner and expect to be treated the same in return. Yes, it may be a little softer around the edges with family, but it’s a good idea to stay within your preconceived and usually unwritten boundaries. It’s not always possible, though, because regardless of the relationship, some people will co-operate and others won’t. But at the end of the day, you want your family to be happy.

I believe that people are fundamentally honest and trustworthy, hence I trust people until they give me a reason to do otherwise. And fortunately, I’m usually trusted in return. Life is definitely easier when you’re so blessed. More often than not, you get what you give and reap what you sow. I earned the faith of my clients – kith, kin and otherwise – by providing honest, dependable service and by trusting them. Of course, I was betrayed occasionally; it’s hurtful, but it happens. However, I never betrayed the trust of a client, for without integrity, you have nothing.

In most situations, your relatives and close acquaintances will hire you. And they’ll do so for one chief reason – they trust you to take extra special care of them. They know in their heart that you’ll not allow them to be cheated, that they can sign documents without worry. Key decisions during the home transition process are made much less stressful with the thoughtful loving guidance of trusting counsel. Again, what is that trust worth? A lot. And it’s worth your full fee.

“A happy family is but an earlier heaven.” George Bernard Shaw

© 2017 REM Real Estate Magazine

BCREA sees a sharp decline in home sales

Josh Sherman
other

The British Columbia Real Estate Association (BCREA) anticipates a sharp decline in home sales and relatively flat prices this year before the market begins recovering in 2019.

In its 2018 Third Quarter Housing Forecast Update, BCREA predicts 82,000 homes will change hands in the province this year, down 21 per cent from the 103,768 transactions recorded through MLS systems in BC last year. Residential sales in BC have averaged 84,800 annually over the past decade and are projected to rebound in 2019 by 8 per cent.

Greater Vancouver sales are expected to fall by 25.7 per cent this year and then surge 13 per cent the year after.

Northern BC, which includes Prince George — recently named BC’s top major market for affordability — appears to be the only market poised for an uptick in activity this year. BCREA calls for activity to finish the year up 1.9 per cent. In 2019, growth of 7.4 per cent is forecast.

Realtors estimate the average price for a Vancouver home will increase 1.9 per cent to $1,050,000 for 2018 and an additional 3.3 per cent over 2019.

In fact, BCREA suggests all 11 member boards will see prices grow over the next two years. The association expects the average price for BC homes in 2018 to inch up 1.9 per cent to $723,200 before climbing 5.3 per cent to $761,600 the following year.

“The BC housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages,” says Cameron Muir, BCREA’s chief economist, in a news release.

Starting this year, stress testing was expanded to include uninsured mortgages from federally regulated financial institutions.

That move was part of Guideline B-20, the series of rules drafted by federal lending watchdog the Office of the Superintendent of Financial Institutions.

To pass the stress test, the borrower has to qualify at the Bank of Canada’s five-year benchmark rate or a rate 2 percentage points over their contractual rate, whichever of the two is higher.

“While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in BC’s large urban centres because of already strained housing affordability,” BCREA’s Muir continues.

As sales have slowed, inventory levels have risen. The number of active listings surged 19.1 per cent in July compared to the number of homes on the market at the end of the same month a year prior.

“We’ve seen inventory creep up since the beginning of the year, albeit we’re coming from a decade low on the inventory side,” Muir observes in a followup interview.

Although the increase in listings has weighed on price growth, BCREA once more notes factors that have somewhat cushioned prices from knockon effects of fewer sales and more robust supply levels.

“Demographics are highly favourable, especially the millennial generation who are now entering their household-forming years. In addition, low unemployment is leading to significant upward pressure on wages and, by extension, household wealth and confidence,” writes BCREA in the news release.

© 2018 BuzzBuzzHome Corp.