Realtors are noticing more Toronto luxury home owners are trying to sell their properties privately through exclusive listings, which don’t appear on the local real estate board’s multiple listing service.
It’s one of the trends outlined in a new report from Sotheby’s International Realty Canada on Canadian top-tier residential real estate.
According to the report, in the first two months of this year sales of Toronto homes priced between $2–4 million dropped 21 percent compared to the same period in 2018. For homes priced above $4 million, the decline was a sharper 29 percent.
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Sotheby’s Canada President and CEO Brad Henderson attributes at least some of the decline to home sellers who are trying to maintain privacy after last year’s Supreme Court decision not to hear the Toronto Real Estate Board’s appeal to keep data, including sold prices, private.
The board had been battling the Competition Bureau, an independent Canadian law enforcement agency, for the better part of a decade over the matter. The Bureau viewed TREB’s handling of the data as anti-competitive, while the board argued it was protecting consumer privacy by only granting realtors direct access.
“It’s very difficult to determine exactly how much of the decline in sales is attributable to that versus the broader dynamics in the market because nobody keeps statistics on how many exclusives are sold versus how many properties would be listed in the multiple listing service,” Henderson tells Livabl.
“But there’s no question that we’ve seen an increase in the number of people who do not want their… information disseminated and therefore have chosen to list on an exclusive basis,” he adds.
More than one realtor Livabl spoke to confirmed confirmed they had seen more exclusive listings at the high end of the Toronto market recently.
Jamie Sarner, a Toronto real estate agent with PSR Brokerage who works with high-end listings suggests the increase in exclusive listings has to do with recent market conditions.
“I think that always happens when there’s an uncertainty in the market,” says Sarner, referring to more exclusive listings being offered.
“The fear always is that you go on the market on the MLS and there’s a history and it’s easily tracked digitally… if you don’t sell, people have the ability to look back,” he notes.
When they do, they might assume a home didn’t sell simply because of the price. “Sometimes it is price, but not always,” he adds.
The uncertainty stems from higher interest rates and government intervention, including mortgage stress testing that was introduced federally last January, Sarner says. The test requires uninsured-mortgage applicants to qualify at an interest rate that is 200 basis points higher than what their lender is offering.
Henderson with Sotheby’s isn’t sure how long the exclusive-listing trend will persist, but he notes that it could spread to other markets across the country. The ruling by Canada’s highest court is expected to set a national precedent. Last September, a month after TREB lost its case, a Vancouver website launched to provide homebuyers with easy access to previous selling prices.
“People will probably become more resigned to the fact that that information is available, but for right now, as long as they have the option to keep it confidential, then they will. We just have to see how that balances out over the next year or more in terms of people’s comfort level,” says Henderson.