Competition Commissioner Melanie AitkenBlair Gable
Buyers and sellers of residential properties in Canada could be in a worse position than they are now under new rules proposed by the real estate association meant to address concerns about anti-competitive behaviour, according to the head of the Competition Bureau.
Competition Commissioner Melanie Aitken said the Canadian Real Estate Association, which voted this week to give those who buy or sell a home more power to handle some portions of the transaction on its Multiple Listing Service, is doing nothing to allay her bureau's concerns about anti-competitive behaviour.
"There's a blank cheque out there for CREA and its members to pass any rules it wants," she told a luncheon at the Calgary Chamber of Commerce Tuesday.
CREA's changes, announced Monday, will allow real estate agents to place a property on MLS for a flat fee charged to sellers. Real estate agents must then hand out the seller's home phone number if requested by the seller to interested buyers who inquire.
Before the change, sellers using the system had to use a real estate agent through the entire sale, which included handing over a percentage of the final price as a commission.
The association hoped the move would placate the bureau, which filed charges in February with the Competition Tribunal, an independent body, against CREA arguing that MLS rules are anti-competitive.
The bureau argues that consumers are denied the real estate services they want and are forced to pay for things they don't need. The system also prevents agents from giving innovative services and pricing regimes to consumers.
The bureau said the latest amendments do not address its concerns.
Ms. Aitken, a former competition litigator, said she wants to see the real estate market opened up to more competition, as is the experience in the United States.
She said in the U.S. merely hiring an agent to list a property on the listing service ranges between $99 and $500. That's different than the system that was in place in Canada.
In her first public comments since CREA's announcement, she reiterated concerns issued in a statement Monday.
About 90 per cent of all residential property sales are done through MLS, which has been around for more than five decades. Only registered agents are permitted to list properties on the service, which is considered a key way to get the best price. The system doesn't prevent anyone from selling a home on their own.
CREA said its changes should address the bureau's concerns while maintaining the integrity and accuracy of the MLS system.
The association has to respond to the Competition Bureau's complaint by Thursday.
Ms. Aitken added that she would still like to negotiate a resolution with CREA.