Economy gets huge boost from realtor commissions!
06 Dec 2019
Canada's economic growth in Q3 got a huge shot in the arm from the real estate sector, which represented more than half of the country's gross domestic product (GDP) gains.
Figures from Statistics Canada showed that real estate transaction revenues contributed $252.28bn to the country’s economic growth in the quarter, up 0.92% from the preceding quarter and 2.7% from the same period last year.
"Quarterly growth is four times higher than all industries, and annual growth is over 80% higher. As you can probably guess here, it's a really big percent of total growth. Like, an unreal amount of the growth," market watcher Daniel Wong said in a think piece in Better Dwelling.
Wong analysed the real estate's economic contribution in terms of constant-price GDP, which removes the impact of inflation. He also considered the biggest and most direct contribution of the sector, which covers real estate, rental and leasing (RERL).
"RERL is the contribution to GDP made during managing, selling, renting and/or buying real estate. To simplify it, it's the commissions made from managing real estate transactions," he said.
Wong said while the real estate market has moderated slightly, the Canadian economy still relies heavily on it. He said that not only do real estate transactions make up a large portion of Canadian growth, their growth is also becoming more prominent in recent quarters.
"The business of moving people around is technically a small portion of total GDP. However, it represents a significant amount of total growth. That's before you add in related industries, like construction and financing," he said.
