Real Estate Is Stimulating
According to the 2011 report Economic Impacts of MLS® Home Sales and Purchases in Canada and the Provinces prepared by Altus Group for the Canadian Real Estate Association, the spin-off benefits of resale activity on the Multiple Listing Service® (MLS®) totals on average $19 billion dollars per year and results in 156,200 direct and indirect jobs. In BC alone, the spin-off spending contributes over $4.5 billion to our economy, representing almost a quarter of Canada's total.
For anyone who has bought a home (never mind facilitated the transaction), you know firsthand how spending doesn't end at the point of purchase – typically there are moving costs, renovations and shopping for new appliances, furnishings and household items. In addition, real estate transactions require fees for professional services and taxes and fees to government.
This ancillary spending or money spent by purchasers on items other than the actual house and land only reflects what is spent after a house is bought or sold on the MLS®. It does not factor in construction costs of new homes or the renovations or improvements sellers may make to their homes to prepare them for sale.
In BC, ancillary spending per household is the highest of any region in the country at $59,675. The next closest region is Ontario at $40,350 followed by Quebec at $36,000. One reason it is so high in BC and Ontario is due to land transfer taxes.
The impact on the local economy is significant. The average new household in BC will spend $2,750 to move, $6,650 on furniture and $10,400 on renovations. New homeowners also spend on average over $2,300 on household improvements such as bedding, towels, lighting fixtures, tools, blinds, etc. And, we pay on average over $9,000 in taxes – over 40 per cent more than our next closest neighbour Ontario, where taxes come in at $5,150.
All this spending generates employment. As indicated above, MLS® home transactions produce multiple thousands of direct jobs – e.g. real estate, construction and appliance sectors – and indirect jobs (industries that provide goods and services to the first group) – e.g. manufacturers of raw materials to produce building products used in home renovations or computers used by financial and real estate service firms.
BC experiences the highest relative job impact of any province. The sale and purchase of MLS® homes in BC generates 34,595 direct and indirect jobs – nearly one in 65 jobs across the entire province, much higher than the national average of one in 109 jobs.
- from REBGV