There appears to be a correlation between the recent decrease in the number of real estate agents in Metro Vancouver and the Fraser Valley and the recent downturn in the local housing market.
In fact, data analyzed by real estate marketing firm Roomvu shows the region saw its first decline in the number of realtors in a decade.
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At the end of the peak of the housing market in 2017, there were about 14,000 realtors across the region. This dropped to about 13,000 in just the following year, marking the first drop in 2008 during the Great Recession.
To date, however, the absolute decrease in the number of realtors has been higher in the current housing slowdown than the financial crisis, when there was just a reduction of about 300 realtors. While global real estate markets plummeted, Vancouver and other Canadian markets were relatively unscathed.
“As the number of transactions fall, many realtors start to give up their licenses, since the fees associated with keeping the license start to outweigh the revenue generated by being a realtor,” said Sam Merhrbod, CEO of Roomvu, in a statement, who believes the downward trend will continue int0 2019 and beyond.
In 2018, all three levels of government enacted various new policies and taxes to curb housing supply in an effort to catalyze housing affordability, including a stress test, empty homes and vacancy taxes, foreign buyers’ tax, speculation tax, provincial school tax, and short-term rental taxes.
The first major intervention was the provincial government’s sudden intervention in August 2016 with the foreign buyers’ tax. But the more recent mortgage stress test changes have had a greater effect; the BC Real Estate Association estimates home sales in the province in 2018 would have been about 10% higher — equivalent to 7,500 units — if the B20 stress tests had not been introduced.
Simply put, there are now far less income opportunities for realtors with the depressed housing market.
Real Estate Board of Greater Vancouver data shows there were 4,400 properties sold and 5,875 properties newly listed in June 2016. In contrast, in June 2018, there were 2,077 properties sold and 4,751 properties newly listed.
Over the same period, average home prices have fallen by about a third.
“Cities like Vancouver, where housing is expensive, have a higher number of realtors than cities like Halifax, for example,” continued Merhrbod. “As home prices go up, so does the financial incentive to take advantage of higher commission prices.”
Analysts also suggest there is a “market correction” with the high number of realtors in the region.
In 2000, the Lower Mainland had approximately 7,000 realtors, but 17 years later this nearly doubled, even though the population only increased by 30%.
Roomvu’s analysis of the number of realtors in the region is based on its calculation on the total number of realtors having at least one listing or one sale in the year.
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