A new report shows that the real estate industry makes a significant contribution to the economic well-being of Canada.
The resale housing industry in Canada generated more than 158,000 jobs and an average of $15.3 billion annually from 2004 and 2006, according to the study prepared for the Canadian Real Estate Association by Altus Clayton.
The report said each residential MLS® transaction generated an average of $32,200 in additional consumer spending in the period from 2004 to 2006. This included the purchase of furniture and appliances, moving costs, renovations, services, and taxes.
“Real estate continues to be one of the major engines driving Canada’s economy,” said CREA president Ann Bosley.
“This study shows the tremendous contributions Canada’s resale housing industry makes to the economy above and beyond the actual cost of the home. When Canadians move, they typically buy new appliances or furnishings, and renovate in various ways to tailor their home to their specific requirements.”
From 2002 to 2004, the average transaction yielded $24,697 in additional consumer spending. In the period from 2000 to 2002, it was $19,760.
The new study says the economic impact of each MLS® sale varies by province or region, from a high of $40,450 in British Columbia to $20,325 in Atlantic Canada.
Based on over 12,300 MLS® sales in Winnipeg last year, there was close to $400 million in economic activity generated locally. While modest in relation to the national figure, it is still a significant contribution to the local economy.
The report said spending relates to the cost of moving from one home to another and for renovations after moving in. It does not include any renovation expenditures by sellers to prepare properties for sale.
“Purchases and sales of homes trigger additional expenditures that have broad economic impacts,” said CREA chief economist Gregory Klump. “Job creation is also a major factor of the sale of a home. The study shows that more than 94,000 jobs are created in Canada each year as a direct result of resale housing transactions.”
The economic impact of the market for existing homes is also reflected in the sales processed by MLS® systems in Canada in 2006. The 2006 national MLS® report from CREA said there were 483,917 residential properties sold through the Multiple Listing Service® last year.