Houses are seen in a suburb located north of Toronto in Vaughan, Canada, in this June 29, 2015, file photo. If houses in Toronto were affordable for middle-class families, they’d cost an average $228,657. The actual average in September was $627,395.MARK BLINCH/Reuters
In a decision that is expected to be a game-changer for Canada's housing industry, Ottawa's Competition Tribunal has ruled that the country's largest real estate board engaged in anti-competitive practices by restricting the way its brokers share home sales data with clients and the public.
The tribunal confirmed in a statement that a three-member panel had issued a confidential ruling partly granting the Competition Bureau's lawsuit against the Toronto Real Estate Board (TREB). The tribunal has yet to issue its full decision publicly, but said it had ruled that the real estate board was stifling competition by restricting the ability of online brokerages to electronically access and publicly display data from the Multiple Listings Service. The MLS is a member-only data feed that offers non-public details about resale listings, such as the number of days a home has been on the market and the home's current and previous selling prices.
The panel ruled that TREB's restrictions "have substantially reduced the degree of non-price competition" in real estate services in the Greater Toronto Area.
"Most importantly, this includes a considerable adverse impact on innovation, quality and the range of residential real estate brokerage services that likely would be offered in the GTA."
In a statement, Competition Commissioner John Pecman cheered the ruling, calling it "a good day for competition and innovation."
Both TREB and the Canadian Real Estate Association, which have argued that allowing realtors to publish automated electronic home sales data would violate the privacy of buyers and sellers, said they were still studying the long and detailed ruling.
Realtors said the decision will likely pave the way for digital disruption of the country's housing industry by allowing online brokerages to offer the public far more details about the local housing market. As a federal body, the tribunal's decisions will likely have implications for other local real estate boards in Canada that have similar restrictions on their own MLS data.
"It's a new beginning for the real estate industry and consumers in Canada," said Bill McMullin, founder of Viewpoint Realty, a site that republishes homes sales data in Nova Scotia, one of few provinces to allow access to MLS data. The ruling will likely help his efforts to expand his business outside of Nova Scotia, he said.
Under the current Toronto real estate board regulations, online brokerages can only provide data to subscribers, not on publicly accessible websites, and only with the permission of the buyer and seller. Last year, Toronto's real estate board sent letters to its members threatening to cut off access to the MLS for some virtual brokers that it warned were violating the rules.
The tribunal said it plans to hold a new round of hearings before issuing its final order. But realtors expect the ruling would ultimately require TREB to expand the electronic data feed it offers to members to include details that many buyers and sellers care about, such as the sale price of a home and how many days it was on the market.
Tarik Gidamy of online brokerage TheRedPin Inc. expects the ruling will open the door to technological innovation in Canada's real estate industry, which has long resisted the broader move toward low-fee, automated online services happening in many other industries.
"There's so much of that data that's just golden and raw where companies like ours want to innovate technologically to give people really easy readable information," he said.
Several realtors challenged the concern that the ruling would undermine commissions .
John Pasalis, president of brokerage Realosophy Realty Inc., pointed to the U.S. experience, where a 2008 Department of Justice settlement with the National Association of Realtors allowed low-cost online brokerages access to MLS data, helping to create popular sites such as Zillow and Redfin. But the move has yet to shift a significant share of buyers away from using full-service commissioned realtors, he said.
Tamsin McMahon