Canadians have rushed to join the ranks of real estate agents and mortgage brokers over the course of the pandemic, a sign of how the housing industry has tightened its grip on the economy.
Across the country, there are signs that aspirants want to take advantage of the housing boom, which has caused home sales and prices to reach record highs in both urban and rural areas.
The number of members of the Toronto Regional Real Estate Board (TRREB) – which the industry sees as a reliable estimate of the number of real estate agents working in the area – jumped 10 percent to about 63,000 during the year ending June 30, according to figures collected by real estate agent Scott Ingram. Put another way, there was at least one real estate agent for every 88 adults in the Toronto region.
By October, nearly 500 people had taken the Nova Scotia real estate licensing course this year, more than double the number in 2018. Membership in the New Brunswick Real Estate Association has increased by 34 percent since the end of 2019, as Atlantic Canada has absorbed a wave of home buyers from elsewhere in the country.
The number of licensed real estate agents in British Columbia has risen 5.8 percent since the end of March, after years of stagnation. And more realtors are coming: By November, about 8,100 people had signed up for the province’s beginner-level licensing course this year – an increase of 175 percent from 2019.
The pandemic changed the working lives of millions of Canadians, but jobs in real estate have remained attractive. The housing industry was quick to return – and with house prices rising rapidly, the already large commissions became increasingly powerful. Provincial training for real estate agents took place largely online and could be completed within months.
Agents have cashed. Property transfer costs – including property commissions and land transfer taxes – rose to 3 percent of gross domestic product earlier this year. The historical average is 1 per cent.
Natalie Finkle of Vancouver was fired when the pandemic first hit. She eventually chose to get her real estate sales license, which took about five months. Ms. Finkle is already working on its 10th transaction.
“It was definitely the best time to enter the market,” she said.
Not everyone will be equally lucky.
In 2017, Mr. Ingram an analysis of the Toronto region. By dividing the total number of housing transactions in the area by the total number of TRREB members, he found that there were about 1.8 transactions that year for each real estate agent, against 4.3 trades per year. pieces in 2002. He assumes that the current relationship is similar to 2017 because sales growth has been offset by more agents shouting at business.
Because each transaction has two sides – buyer and seller – most trades involve two agents, which means that Mr. Ingram’s 1.8 transactions actually correspond to about four earnings opportunities per. TRREB member. Assuming a commission rate of 2.5 percent and the region’s average selling price of nearly $ 1.2 million, an agent would cash in well over $ 100,000 from just four customers. But that is before a wide range of costs are deducted, including brokerage and licensing fees, car leasing, insurance and so on.
And while four clients may be average, some real estate agents do much worse.
The Toronto market is oversaturated with agents, Mr. Ingram, and “the competition is certainly tougher” than it used to be.
A mitigating factor is that some agents are not really active in the industry.
“There are a huge number of people jumping in and out,” said Drew Woolcott, a veteran broker in the Hamilton area. “They have a license, and if their uncle calls, they will make that deal.”
It seems that there is a lot of turnover among mortgage brokers and brokers who are helping buyers secure loans. As of September 30, about 7,300 new mortgage agents had joined the industry in Ontario during the pandemic. But the total number of licensed mortgage brokers in the province had only increased by about 3,350 people, suggesting that many had dropped out.
Naween Thomas of Ottawa became a mortgage agent this year. He works full time in the industry, but he knows people who have had to keep up with the hustle and bustle as they have tried to establish themselves. “Those are the first few years that are tough,” he said. “A lot of people apparently can’t get through that hump.”
In his case, it took three or four months to close his first deal. During that time, he said, he kept saying to himself, “Things are getting better.”
Property Agents working with buyers must overcome Canada’s shortage of housing stock and deteriorating affordability. “If you’re in Mississauga and Brampton, you can not really help people who are not approved for more than a million dollars,” said Milan Pandey, who became an agent after the pandemic started. When he gets customers with six-figure budgets, he shows them houses in Whitby, Ajax and Hamilton. He’s on the road “more than an Uber driver,” he said.
From up close, Mr. Pandey can see the pain and stress of buyers being priced. “I have customers crying,” he said.
Still, he has no regrets about joining the industry after a career in tech startups. He has managed to close three deals for buyers so far and has brought customers in through word of mouth.
“It’s super busy – insanely busy,” he said. “I wish I started five years ago.”