Nearly a year after the Toronto Real Estate Board lost its appeal to the federal Competition Bureau over the issue of sold data, it turns out its privacy concerns were valid.
Sotheby’s International Realty Canada’s 2019 Mid-Year Real Estate Report revealed a 19% year-over-year sales decline in the Multiple Service Listings of Toronto homes priced over $4 million, but it doesn’t tell the whole story, says Don Kottick, Sotheby’s president and CEO.
“We’re starting to see in the $4m-plus range that sellers are opting to have their properties sold exclusively through the brokerage as opposed to going on the MLS, and this is largely due to privacy concerns over sold data,” Kottick told REP. “They’re opting to use brokerages with big, strong international networks with very strong marketing and that have strong internal networks, rather than going on the MLS where data gets shared in the public domain. We’re seeing more exclusives than we have in the last few years.”
Conversely, there has been a 12% year-over-year sales increase of homes priced over $1m through the first six months of the year, indicating that sellers have privacy thresholds.
“The reality is [$4m-plus] properties are selling,” continued Kottick. “Years ago, a lot of listings were traditionally brought and tested on the market exclusively, so it’s almost a return to the old days. It’s not a concern at all, but what it does do is skew the information available for the MLS. It just brings a little variance when comparing historical data and it reinforces the need to have big brokerages with strong marketing internationally to facilitate the sales.”
Matt Smith, a real estate broker with ENGEL & VÖLKERS Toronto Central, says many luxury homes priced $2m and up are listed exclusively, as well, but it isn’t necessarily a bad thing.
“It’s typically with the older demographic,” he said. “They don’t want things on the public record, whether nosy neighbours or a hundred people coming through their homes; they want select prequalified people coming through, and things are moving quickly. I can sell an exclusive in, say, Yorkville in a couple of days.”
Opening sold data to the public, added Smith, has been good for individuals, but not the market, because the latter wants the most accurate data it can get—something exclusives flout. Moreover, a dearth of data on comparable properties makes listing accurately arduous.
“Because of that, Broker Bay has spawned up,” said Smith. “It’s a database for exclusives that the brokerage community uses and it’s become a really important tool over the last 12 to 18 months for this reason. We basically have our own MLS for exclusives and we know what they sell for. It’s a group of top-tier brokerages in the city—you have to become a member.”