Newfoundland Real Estate and Commission Calculator 2024
What Are Real Estate Commissions in Newfoundland?
The typical real estate agent commission in Newfoundland and Labrador is 5% of the sold price of a home, but it can range from 3% to 5%. This commission is usually split 50/50 between the buyer and seller agents. The seller of the home would pay this 5% commission, with there normally being no fee for homebuyers in Newfoundland.
Newfoundland and Labrador Real Estate Commission
What is the Average Real Estate Commission Rate in Newfoundland?
$750,000 Property Selling Price Example
The above chart demonstrates the following: 5% commission on the selling price and a 15% tax that is applied to the total commission. The remaining amount is what you receive.
Comparison of Real Estate Commission Across Provinces
| Province | Typical Real Estate Commission Rate | Average Sold Prices of Homes in April 2024 | Average Total commission Paid to Both Agents |
|---|---|---|---|
| Alberta | 7% for 1st $100K and 3% for the remaining balance | $499,505 | $18,985 |
| Ontario | 5% of total price | $900,161 | $45,008 |
| B.C. (Greater Vancouver Area) | 7% for 1st $100K and 2.5% for the remaining balance | $1,006,248 | $29,656 |
| Saskatchewan | 6% for 1st $100K, 4% for the 2nd $100K, and 2% for the remaining balance | $324,474 | $12,489 |
| Manitoba | 5% of the total price | $382,658 | $19,133 |
| Quebec | 5% of the total price | $498,124 | $24,906 |
| Nova Scotia | $1,500 flat fee for properties under $25,000 and 5% of the total price for other properties | $468,543 | $23,427 |
| New Brunswick | 5% of the total price | $334,561 | $16,728 |
| Prince Edward Island | 5% of the total price | $379,366 | $18,968 |
| Newfoundland and Labrador | 5% of the total price | $304,570 | $15,228 |
Ontario and British Columbia have some of the highest housing prices, which results in higher average total real estate commissions. Although British Columbia’s real estate commission rates are one of the lowest in the country, homeowners ultimately end up paying a comparatively higher real estate commission due to the higher average selling price of homes.
Newfoundland Real Estate
Newfoundland’s real estate market was buzzing with energy in 2021 as home sales soared. An island located off the east coast of Canada, Newfoundland makes up the majority of the province’s population, with a smaller population on the mainland of Labrador. St. John’s, the capital of Newfoundland and Labrador, was the centre of Newfoundland’s real estate boom and led the province in real estate activity.
Just like the sleepy Atlantic provinces, Newfoundland’s real estate market wasn’t always this frantic. Home prices have been decreasing in the province since 2014, where the average home price reached over $300,000, before falling every single year to just over $225,000 in 2020. Sales activity saw itself on the same slope, decreasing gradually since 2011. This dire situation follows demographic changes in the province. Newfoundland and Labrador's population has been shrinking since 2016, while the province’s unemployment rate went from just over 11% in 2014 to over 15% in 2016.
Newfoundland’s ill-fortune was reversed in mid-2020 and into 2021, with the number of home sales doubling and home prices soaring. While this wasn’t enough to bring home prices back above 2014 levels, average home prices are still getting awfully close to their recent peak.
The introduction of a new immigration program, called Priority Skills NL, will further boost home demand in the future. Priority Skills NL will invite 250 to 350 immigrants to Newfoundland in 2021. In comparison, the province saw just over 4,000 home sales in 2019, with over half of that in the St. John's area. The Atlantic Immigration Pilot also helped bring in 500 immigrants to Newfoundland from 2017 to 2019. Immigration will help to reduce the population loss that Newfoundland has experienced for some time. From January 2020 to January 2021, Newfoundland's population decreased by just over 3,000.
According to the 2016 Census, most homes in Newfoundland are single-detached homes, at 73.3% of all homes. This is followed by attached homes, such as townhouses, semi-detached, and low-rise apartments making up 25.7% of all homes. Only 0.4% of homes were apartments in buildings with five or more stories. 167,700 homes were owned, while 50,530 were rented.
Newfoundland Real Estate Market Performance
Home sales in the second quarter of 2021 are up 120% over 2020 levels, with 1,755 home sales. This is the highest level of sales that the province has seen in history. Most sales in Newfoundland are for single detached homes, with 1,204 sales, while attached homes had 255 sales. Even though detached homes outnumbered attached homes in sales, the opposite was true for home prices. The median price of attached homes was $307,500, higher than the median price of single detached homes at $269,900.
St. John’s Real Estate Performance
St. John's real estate market was seen to be tighter in 2021 compared to the rest of the province. Detached homes in St. John's had 5.8 months of inventory compared to 6.3 months for the province in the second quarter of 2021. The median number of days in St. John's for a detached home was also 67 days, lower than the province's median of 83 days. The same pattern was seen for multi-family attached homes. Home sold quicker in St. John’s, and there was less inventory available in the city.
Looking at St. John’s rental market, the city matched the provincial average in its rental vacancy rate. The apartment vacancy rate in St. John’s was 7.5% in 2020, slightly less than Gander at 8.4% and Grand Falls-Windsor at 9.9%. However, Corner Brook had the lowest vacancy rates in the province at just 2.8%.
Meanwhile, St. John’s had the highest average apartment rents in the province at $903 per month. This is higher than Gander’s $696/month, Grand Falls-Windsor’s $743/month, and Corner Brook’s $765/month. Interestingly, apartments had higher average rents than townhouses in St. John’s. The average townhouse rent in St. John’s was $881/month in 2020, with lower vacancy rates at 7.3%.
Becoming a Real Estate Agent in Newfoundland
In light of Newfoundland’s and St. John’s spectacular growth, the province’s real estate market is becoming increasingly attractive for real estate agents. In fact, Newfoundland real estate agents had the highest salaries in Canada, even higher than real estate agents in Ontario or British Columbia.
This is helped in part to the relatively low number of agents in the province compared to the numbers of homes sold per year. There are 700 agents in Newfoundland, but 8,424 homes sold in 2021. That translates to roughly 24 transactions per agent per year. While the average commission per transaction is slightly lower than other expensive real estate markets in Canada, due to the lower average home prices in Newfoundland, real estate agents in the province make up for lower average commissions through higher transaction volumes.
How do you become a real estate agent in Newfoundland? First, you will need to complete your pre-licence training. This training course costs $1,520 and is done at your own pace. Once you have passed a multiple-choice exam, you can apply for your real estate license. In order to get your Newfoundland real estate license, you will need to be employed by a licensed real estate brokerage.
Newfoundland Real Estate License
The Newfoundland real estate license comes with some upfront fees that you will need to pay, in addition to the pre-license course. The Service NL license fee costs $200, and the Real Estate Recover Fund costs $250 if you're registering for a salesperson license or $450 for a broker license.
There are also fees if you join the Newfoundland and Labrador Association of Realtors (NLAR). The upfront fee to join NLAR and the Canadian Real Estate Association (CREA) is $700, with the NLAR charging a $58 quarterly fee and the CREA charging a $310 quarterly fee.
The Real Estate Insurance Association (REIA) also charges fees for errors and omissions insurance. The insurance itself costs $515, while the errors and omissions initiation fee costs $100.
All of these fees are subject to Newfoundland’s 15% HST. This sales tax rate is among the highest in Canada.
Types of Newfoundland Real Estate Licenses
There are two types of real estate licenses in Newfoundland: a Salesperson’s License and a Broker’s License. The Salesperson's License requires you to pass a training course about the fundamentals of real estate. You'll receive a textbook to study at your own pace, and you will have one year to pass an exam. The minimum passing grade of the exam is 70%. If you fail the exam, you can re-write the exam for $100. You can only attempt the exam up to three times. After three attempts, you will need to wait six months before writing the exam again, and pay a $531 fee.
Exams are held in person at College of the North Atlantic campuses. Campuses that offer licensing exams include St. John's, Gander, Corner Brook, and Happy Valley-Goose Bay.
For a broker's license, you will need to pass a course on office management and brokerages. Similar to a salesperson's license, you have one year to pass a multiple-choice exam. The cost of the training course for a broker is the same as the course for a salesperson.
Realtors in Newfoundland are required to be part of the NL Realtor Professional Development Program (RPDP). The RPDP is a requirement for being a realtor in Newfoundland and requires realtors to complete a minimum number of credits and a mandatory course every two years. If realtors don't complete the minimum number of credits, then their membership will be suspended.
In 2020, the mandatory course is "Dealing with Ethical Behaviour", and is an online course that costs $75. Realtors are also required to complete 12 credits. Some courses are free, such as Leadership 100, and can provide up to 3 credits each. Other courses, such as Competition Law for Realtors, also grant 3 credits but cost $75. These online courses are delivered through NLearn.
About Newfoundland Real Estate Commissions
If you're selling a home in Newfoundland, you'll likely pay a real estate commission of 5%, plus a 15% HST on the commission paid. Did you know that real estate agents are not allowed to charge a commission based on the difference in a home's listing price and the actual selling price of the home in Newfoundland? The Newfoundland and Labrador's Real Estate Trading Act regulates real estate commissions in the province. There are also other regulations, such as if a commission amount was not agreed upon prior to a sale, then the commission will be based on the average commission charged in the area.
Most provinces in Canada require real estate brokerages to hold real estate commissions in a separate brokerage trust account. Newfoundland is a unique exception to this, as there is no requirement to segregate commissions. The Lieutenant-Governor in Council also has the authority to fix or limit commission or commission rates charged by real estate agents in Newfoundland and Labrador.
Disclaimer:
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- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.