Realtor commissions in Canada have surged significantly over the past decade, raising concerns about their impact on housing affordability amid rising home prices. Data from Toronto indicate that the average total commission earned by real estate agents on home sales climbed from approximately $31,176 in 2015 to $53,392 in 2025, an increase of 71 percent that far outpaces inflation.
Most realtor fees remain structured as a percentage of the home’s sale price, a practice critics say contributes to affordability challenges. Although commissions have declined slightly in recent years alongside a cooling housing market and falling national home prices, they remain substantially higher than a decade ago despite realtors’ duties staying largely consistent.
The traditional commission model in Canada typically involves the seller’s agent paying a portion of their commission to the buyer’s agent through arrangements mandated by the Canadian Real Estate Association (CREA). Because buyers rarely pay their agents directly, they often lack incentive or ability to negotiate lower fees. The fees are largely embedded in the home prices paid by buyers.
Industry sources acknowledge that realtor fees are not legally fixed and CREA maintains that its policies are pro-competitive and consumer-focused. Realtors also note that the commissions they receive must cover brokerage fees, licensing, insurance, and other expenses, resulting in lower take-home income. Nonetheless, the conventional fee arrangements have remained largely unchanged, supported by industry norms and provincial variations.
One factor underpinning the current model is the reluctance of sellers’ agents to reduce commissions offered to buyer’s agents, as research indicates homes with lower buyer-agent commissions tend to remain on the market longer and have lower chances of sale. This dynamic may discourage competition on fees.
Regulatory scrutiny of these practices is intensifying. The Competition Bureau is investigating the requirement that sellers’ agents pay buyers’ agents’ commissions and is considering whether this arrangement could impede competition. No formal findings have been announced, but the bureau could seek remedies if legal concerns arise. Additionally, a class-action lawsuit has been launched challenging aspects of this system.
The Competition Bureau is also examining CREA’s policy that mandates residential listings be entered into the Multiple Listing Service (MLS) database within three days of public marketing. The inquiry focuses on whether this rule disproportionately benefits large brokerages by granting them earlier or greater access to listings compared to smaller firms.
Consumer advocates suggest that buyers would gain more negotiating power over commissions if they directly paid their agents. Greater transparency in fee structures and a shift toward flat-fee or lower-fee models could enhance competition. Flat-fee services, which charge fixed amounts regardless of home price fluctuations, are seen as promising alternatives that could improve affordability and benefit younger or budget-conscious buyers.
While real estate agents provide valuable expertise in complex transactions, industry observers argue that revisiting the commission framework is necessary. Expanding pricing options could allow consumers to choose services that better align with their financial circumstances, potentially easing barriers to homeownership in an increasingly challenging market.