Brokers did indeed jump out of the blocks to capitalize on a new trade agreement making it easier to get licensed in other provinces, although FSCO numbers point to an overwhelming interest in one market.
Just over 100 Ontario brokers have asked FSCO to prepare the necessary paperwork to present to regulators in Alberta, a representative of the Financial Services Commission of Ontario told MortgageBrokerNews.ca, at this week’s CAAMP Mortgage Forum.
That number dwarfs that for Ontario brokers looking for the same certification letters to present to industry regulators in B.C. Less than five mortgage professionals have made that request.
Broker-saturated B.C. isn’t the only market being snubbed by brokers looking to grow their books by expanding into new markets. Ontario, itself considered a province over-populated with mortgage professionals, has attracted only about seven applications from brokers in other provinces since recent changes to the Agreement on Internal Trade kicked in July 1.
Those amendments governing the way provinces trade and deal with each other have made it easier for individuals already licensed in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba or Québec to win the equivalent licensing in any of those other provinces without in fact having to meet new education and experience requirements.
For many brokers it now allows them to act as their own principal brokers in provincial markets where they have agents but were themselves unable to win licensing. Prior to those changes most relied on a local broker to take on those duties. The new rules allow them to cut out that middleman and potentially pave the way for quicker and less costly inter-provincial expansion.
Alberta has been the recipient of most of those expansion plans, with brokers in B.C. following the lead of their counterparts in Ontario.
It may be a case of thinking the grass is greener on the other side, though.
“I’m hoping to get licensed in Alberta, during the licensing period there,” Scott Dawson, a broker with Verico Paragon Pacific Mortgages in Burnaby, told MortgageBrokerNews.ca this fall. “I’m busy this year and have exceeded last year’s funded volume, but there are sections of the market here that have slowed. Given the average home price and the economy, in terms of the potential for originations, Alberta is very attractive.”
He’s not the only Vancouver mortgage professional casting eyes over the border at the only housing market in the West to virtually maintain 2010 levels of affordability. While MLS sales in Calgary rose some 22.1 per cent in August, compared to the year-ago period, selling prices eked out only a 2.2 per cent gain.
It’s a remarkably different picture from B.C.'s Lower Mainland, where the average home price -- while skewed by high-end sales in Richmond, West Vancouver and the West Side – rose 14 per cent last month, compared to the August 2010 average of $680,782.
Still, brokers in Alberta are offering their eager counterparts in B.C. and Ontario a word to wise about the market where the average home price is less than half that of Vancouver’s. It means commissions on originations – even if Vancouver brokers succeed at winning them – will be similarly modest.
“Obviously, two deals (in Calgary or Edmonton) at $250,000 are better than no deals at $1 million in Vancouver,” Daniel Alves, an associate broker at Link Lending in Edmonton, told MortgageBrokerNews.ca. “But there are two things that they need to consider. One: how many deals are they realistically going to be able to close without being on the ground in our market? And, two: closed mortgage business follows the effort made by a broker to win that business, and obviously there are mortgages closing in BC – maybe they should look more closely at what they are or are not doing to win the business happening in their own market.”