A growing number of high-end home sellers in Toronto are opting not to list through the public listing system after a court ruling last year that opened up public access to sale price data, according to real estate firm Sotheby’s International Realty Canada.
In its latest luxury home sales report, Sotheby’s said sales of homes worth more than $4-million and sold through the Multiple Listings Service (MLS) system fell by 19 per cent in the Greater Toronto Area in the first six months of 2019, even as sales climbed at other price levels.
Don Kottick, chief executive officer of Sotheby’s Canada, said he has not seen a slowdown in luxury sales, but has seen an increase in the number of sellers deciding not to list on MLS so they don’t have to disclose the sale price. Instead, they do an exclusive listing with a brokerage firm that promotes the property within its system, but does not list it on MLS, which keeps the sale price private.
While some other realtors said they have not seen the same pattern emerge yet, Mr. Kottick said he has seen more exclusive listings of all types of homes.
“It is prevalent in the [more than] $4-million range, but it’s starting to happen right across the market,” Mr. Kottick said.
In a decision last August, the Supreme Court of Canada declined to hear an appeal in a dispute between the Toronto Real Estate Board and the federal Competition Bureau, ending seven years of legal battles. The decision left in place a Federal Court of Appeal ruling that now allows companies to publish the sales prices of homes.
Since then, many real estate companies have begun to display sold prices for GTA properties on their websites, although viewers must have a free subscription and password to see the information.
The decision to stay off MLS means fewer potential buyers see a listed property, but Mr. Kottick said agents dealing in luxury properties know what is available for sale in their area and buyers still find the homes.
Jimmy Molloy, a Toronto realtor who specializes in luxury home sales with Chestnut Park Real Estate, said he has not had any clients balk at an MLS listing since the court decision, and believes an MLS listing is a “phenomenal" tool to reach buyers.
Instead, Mr. Molloy said he is seeing more luxury homes sell privately before they even get listed on MLS because there is a shortage of great luxury properties. Agents who hear a “special” house is about to be listed hurry to get their buyers into it in advance.
“In some cases you can even have several agents and their buyers looking at the same property before it hits the market,” he said.
Justine Deluce, a Toronto-based real estate agent for luxury homes, said she also hasn’t seen more people bypassing MLS because of the court ruling. She said some of her clients who forgo MLS are prominent people who do not want photos and information about their house made public, but are typically less concerned about revealing the final sales price.
Sotheby’s latest luxury report shows the volume of GTA homes sold between $2-million and $4-million climbed by 9 per cent in the first half of 2019, based on MLS data, while sales of homes from $1-million to $2-million climbed by 13 per cent.
Vancouver is seeing the opposite trend for luxury properties, with sales of homes priced more than $1-million falling by 33 per cent in the first half of 2019 compared with the same period last year, according to the Sotheby’s report.
The condominium market was the main cause of the slump, with sales of condos priced more than $4-million plunging by 69 per cent, while the number of condo sales between $2-million and $4-million dropped by 56 per cent. Condo sales between $1-million and $2-million fell by 49 per cent.
Mr. Kottick said Vancouver’s detached house market cooled considerably in 2018 while the condo sector remained comparatively stronger until this year. “There was almost a lag time, a delayed reaction, in the condo category,” he said.
However, he said Sotheby’s agents in Vancouver believe the market is stabilizing because more sellers are willing to list at realistic current price levels, which is even spurring bidding wars for some homes.
The strongest luxury market for condominiums this year has been in Montreal, where total sales of condo units more than $1-million climbed by 40 per cent in the first half of the year, the report shows.
The trend is driven by the growing number of new high-end condominiums that were built in the past three years, providing a luxury condo inventory in Montreal that didn’t previously exist, Mr. Kottick said.