When you buy a home, you’re contributing to the economic well-being of your community, province and nation, according to a new study.
The resale housing industry in Canada generated more than 100,000 jobs and fueled ancillary spending an average of $10.8 billion annually in the period between 2002 and 2004, reported the study prepared for the Canadian Real Estate Association.
“The study shows the tremendous economic impact of the housing industry, outside of the actual cost of the home,” said Gregory Klump, the chief economist of the Canadian Real Estate Association. “When Canadians move, they typically buy new appliances or furnishings, and renovate in various ways to tailor their home to their specific requirements.”
The study by Clayton Research said in the 2002-04 period each MLS® transaction generated a national average of $24,697 in additional spending. This included the purchase of furniture and appliances, moving costs, renovations, services, and taxes.
A similar study published in 2003 said that each MLS® transaction in the period 2000-02 fueled an average of $19,760 in consumer spending.
In Manitoba during 2002-04, MLS® homes sales created 2,980 direct and indirect jobs in the construction sector, manufacturing, professional services such as real estate, lawyers, appraisers, surveyors, finance and insurance, and retail.
“In the Prairies, although the proportion of jobs generated in finance, insurance and real estate industries is similar to the national average,” the study said, “the proportion of those jobs which are direct, as opposed to indirect, is higher.”
The Clayton study said the economic impact of each MLS® sale varies by province or region, from a high of $27,873 in British Columbia to $16,896 in Atlantic Canada.
In the Prairie provinces, which includes Manitoba, Saskatchewan and Alberta, the economic impact from each MLS® sale was $18,218.
The average annual spin-off benefits of MLS® activity in Manitoba for 2002-04 was $198 million.
The report notes the spending only relates to the cost of moving from one home to another, and does not include any renovation expenditures by sellers to prepare properties for sale.
“Job creation is also a major factor of the sale of a home,” said Klump. “The study shows that almost two-thirds of the jobs created annually because of the resale housing market, are a direct result of the transaction.”
The economic impact of the market for existing homes is also reflected in the sales processed by the MLS® system in Canada in 2004. The MLS® 2004 national report from the Canadian Real Estate Association said there were 461,112 residential properties sold through MLS® last year, beating the previous record set in 2003 by more than six per cent.
In terms of the average of consumer expenditures per MLS® transaction, there has been an increase in the period from 1991-92 to 2002-04, according to the study.
For example, moving costs went up 46 per cent to $714; general household purchases were up seven per cent to $1,409; furniture/appliance purchases rose by one per cent to $3,433; renovations were up 25 to $4,449; and professional service costs went up 39 per cent to $13,144.