The Company’s performance is driven by royalty revenue which, in turn, depends partially on the level of residential resale real estate transactions. The residential real estate industry is affected by the many factors affecting the economy in general, including changes in interest rates, unemployment and inflation, and by regulations directed at the mortgage and housing markets.
Approximately 69% of the Company’s royalties are fixed in nature, based on the number of REALTORS®¹ and their productivity. As the number of REALTORS® does not change significantly from quarter to quarter, this royalty mix mitigates the affect of fluctuations in real estate sales volume and prices.
This section provides background on the real estate industry.
1 REALTOR® is a trademark identifying real estate licensees in Canada who are members of the Canadian Real Estate Association