Canadians have rushed to join the ranks of realtors and mortgage brokers during the pandemic, a sign of how the housing industry has tightened its grip on the economy.
Across the country, there is evidence of aspirants looking to capitalize on the housing boom, which has seen home sales and prices hit record heights in urban centres and rural locales alike.
The number of members of the Toronto Regional Real Estate Board (TRREB) – which the industry views as a reliable estimate of the number of real estate agents working in the area – jumped 10 per cent to about 63,000 during the year ending June 30, according to figures collected by realtor Scott Ingram. Put another way, there was at least one realtor for every 88 adults in the Toronto region.
Through October, nearly 500 people had taken the real estate salesperson licensing course in Nova Scotia this year, more than double the number in 2018. Membership in the New Brunswick Real Estate Association has surged 34 per cent since the end of 2019, as Atlantic Canada has absorbed a wave of homebuyers from elsewhere in the country.
The number of licensed realtors in British Columbia has risen 5.8 per cent since the end of March, after years of stagnation. And more realtors are coming: Through November, about 8,100 people had enrolled in the province’s entry-level licensing course this year – up 175 per cent from 2019.
The pandemic upended the work lives of millions of Canadians, but jobs in real estate have remained attractive. The housing industry was quick to rebound – and, with home prices rising rapidly, already-hefty commissions got heftier still. Provincial training for realtors was largely conducted online, and could be finished within months.
Agents have cashed in. Ownership transfer costs – including real estate commissions and land transfer taxes – vaulted to 3 per cent of gross domestic product earlier this year. The historical average is 1 per cent.
Natalie Finkle of Vancouver was laid off when the pandemic first hit. She eventually opted to get her real estate sales licence, which took about five months. Ms. Finkle is already working on her 10th transaction.
“It definitely was the best time to get into the market,” she said.
Not everyone will be as fortunate.
In 2017, Mr. Ingram published an analysis of the Toronto region. By dividing the total number of home transactions in the area by the total number of TRREB members, he found that there were about 1.8 transactions that year for each realtor, versus 4.3 deals a piece in 2002. He suspects the current ratio is similar to 2017, because sales growth has been offset by more agents clamouring for business.
Because every transaction has two sides – buyer and seller – most deals involve two agents, meaning Mr. Ingram’s 1.8 transactions actually amount to about four earning opportunities per TRREB member. Assuming a commission rate of 2.5 per cent and the region’s average sale price of nearly $1.2-million, an agent would rake in well above $100,000 from just four clients. But that’s before a litany of costs are subtracted, including brokerage and licensing fees, car leases, insurance and so on.
And although four clients may be the average, some realtors are doing much worse.
The Toronto market is oversaturated with agents, Mr. Ingram said, and “competition is definitely tougher” than it used to be.
One mitigating factor is that some agents aren’t truly active in the industry.
“There are a tremendous number of people that hop in and hop out,” said Drew Woolcott, a veteran realtor in the Hamilton area. “They have a licence, and if their uncle calls, they’ll do that deal.”
It appears there is plenty of turnover among mortgage agents and brokers, who help buyers secure loans. As of Sept. 30, around 7,300 new mortgage agents had joined the industry in Ontario during the pandemic. But the total number of licensed mortgage agents in the province had increased by only about 3,350 people, suggesting many had dropped out.
Naween Thomas of Ottawa became a mortgage agent this year. He’s working full time in the industry, but he knows people who have had to keep up side hustles as they’ve tried to establish themselves. “It’s the first couple of years that are rough,” he said. “A lot of people can’t seem to 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 telling himself: “Things are going to get better.”
Real estate agents working with buyers have to overcome Canada’s scarcity of housing inventory and worsening affordability. “If you’re in Mississauga and Brampton, you can’t really help out people that are not approved for more than a million dollars” for a detached home, said Milan Pandey, who became an agent after the pandemic started. When he gets clients 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 who are getting priced out. “I have clients 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 in clients through word of mouth.
“It’s super busy – insanely busy,” he said. “I wish I started five years ago.”
Editor’s note: This version has been updated to clarify the amount needed to buy a detached home in Mississauga and Brampton.
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