Have you ever had the feeling that every day you look around and see another new real estate agent on the scene? You aren't crazy. Real estate careers have become a very popular choice for those looking for a dynamic job with a low barrier to entry, high earning potential, the ability to be your own boss, and an opportunity to help your clients make their dreams come true. As a result, many people are beginning in the industry every year.
However, with a limited number of homes available to be sold, the question is whether or not there are simply too many realtors. Let's take a look at just how many realtors are in Ontario, how much business they do, and what it means for those in the real estate industry.
Just how many real estate agents are there?
It isn't very easy to know exactly how many real estate agents are working in the province, though we can get a rough idea.
Canadian Real Estate Association (CREA)
According to the Canadian Real Estate Association, there are over 140,000 real estate agents registered as members of the organization. These agents are spread across all provinces and territories and are collected into 79 different regional real estate boards.
Ontario Real Estate Association (OREA)
Looking at Ontario specifically, we look to the Ontario Real Estate Association for data. According to their website, they currently comprise over 82,000 members in the province of Ontario.
Furthermore, according to the most recently published yearly report for 2020, the organization welcomed around 5,800 new realtors in that year. Based on data from 2015 - 2020, the organization welcomes around 6,500 new realtors a year on average.
These Ontario realtors are spread across 36 local real estate boards in Ontario. This would mean there are around 2,200 realtors per real estate board, however, due to the varying sizes of regions, there are some areas with far fewer agents and areas with far more. For example, the area around the city of Toronto and the GTA that is home to over 40% of the population of the entire province is covered by just five or six regional boards. The largest real estate board in the province is The Toronto Regional Real Estate Board (TRREB) that claims over 60,000 members in its organization alone, representing a large portion of the total number of agents in the province.
It is also of note that membership in the Ontario Real Estate Association is voluntary. There are a number of people who are not part of OREA or a regional real estate board, so we can't rely entirely on their numbers. The Real Estate Council of Ontario, in which membership is mandatory for all real estate professionals in Ontario, cites more than 86,000 real estate agents in Ontario, a significant increase over the OREA data.
We should also remember that just because an agent is registered with these organizations, this does not mean they are actively practicing in real estate. Though there are requirements for membership renewal, it is safe to assume that at least some of these registered agents are not actively working in real estate sales on a day-to-day basis.
How much business is the real estate industry doing?
Now we must face the question of whether or not there are too many agents in the province. To put it simply, it does not seem that there is an overload of agents in the province.
First of all, the simple fact that there are still new salespeople beginning their careers every year is a good sign. There just would not be so many eager workers if there were no prospects whatsoever in the industry.
In addition, real estate unlike many other industries has actually seen major benefits from the pandemic. Though markets faltered initially in 2020, they have since seen massive growth in almost every area of the province.
According to data from OREA covering the first 11 months of 2021, there were about 257,500 residential home sales in the province. If we go off of the OREA membership estimate from before, this would mean about three home sales for every registered agent in the province.
How much money agents are making is hard to say as the true amount of property sold, the value of those homes, and the commission split received will vary with each deal.
The Government of Canada estimated that the median income for a realtor in Ontario is $45,586. However, it has been reported by multiple real estate agents and organizations that 2021 has been a record year for sales and value.
Is it sustainable?
It is well known that real estate activity and prices in Canada have continued on an upward trajectory for years now. In the last couple of years, it has seen an even larger and unprecedented boom, leading many to start looking at real estate as a lucrative career option. And for the most part, these people have been pretty successful as a result of the strong market. In the fourth quarter of 2021, Ontario witnessed an over 20% growth in home sales compared to the same period in 2020 – more than enough to keep the many agents in work.
There is, however, some concern of the effects of a cooling housing market that something may be on the horizon. Whether or not this is actually imminent is pretty contentious, but the most common prediction is a gradual deceleration of the market into 2022 and beyond. Assuming there is no serious market correction or turnaround, there should still be plenty of work for Ontario's agents as demand stays high, though it could limit the number of new agents starting out.
Thinking of becoming a realtor?
You might be thinking of starting out in a real estate career but are worried that there is too much competition. The fact is, there is a lot of competition, and you should not look at real estate as a get-rich-quick scheme. Like any other job, it requires skill and hard work to attain success, but it is certainly doable. While there are those who are not cut out for the industry and struggle, there are many others who succeed far beyond the pack. You should not see competition as a discouraging factor or a reason why not to get into real estate. You should merely be aware of it, and be prepared to do what it takes to remain competitive.