Commercial PropertyCanadian Study Shows Impact Of MLS Home Sales On Economy
According to a new report researched by the Canadian Real Estate Association (CREA,) the economic benefits of MLS home sales is great, with each home sale impacting consumer spending by an additional $32,200 over the subsequent three years after the purchase. That"s furniture, appliances, remodeling, services and taxes included.
And that doesn"t even include what sellers spent to get their homes ready for sale.
The purchase and sale of homes generates fees for lawyers, appraisers, real estate agents, surveyors, etc., as well as taxes and fees to the government. In addition, says the report, homebuyers purchase new appliances or furnishings, and typically undertake renovations that tailor the new home to specific household requirements.
In fact, the resale housing industry in Canada generated more than 158,000 jobs and an average of $15.3 billion annually in the period between 2004 and 2006, according to information gathered by Altus Clayton for CREA. This is CREA"s fourth study showing the economic impact of existing home sales and purchases.
On average, job creation is the major side benefit of MLS housing sales. The study found that more than 94,000 jobs are created in Canada each year as a result of resale housing transactions, says CREA president Ann Bosley.
Homebuyers spent the following amounts:
Moving - $1,650 - 131% more than 2002-2004
General household purchases - $1,300 - 8% less than in 2002-2004
Furniture/appliances - $3,950 - 15% more than 2002-2004
Renovations - $7,475 - 68% more than 2002-2004
Professional services - $15,550 - 18% more than 2002-2004
Taxes (excluding GST) - $2,275 - 47% more than 2002-2004
Between 2004 and 2006, average annual jobs created by the MLS home sales industry:
Manufacturing - 11,540
Construction - 22,910
Trade - 25,920
Finance, insurance, and real estate - 45,530
Other services - 25,090
Canada-wide, one-third of the jobs created were in finance, insurance and real estate.
Some regions benefitted more than others. In Ontario, homebuyers contributed $6.5 billion to the economy. In Alberta, 40 percent of jobs were generated by home sales and purchases. The least to benefit was Saskatchewan with 16 percent of job creation stemming from home sales.
The impact on the Canadian economy is both direct and indirect, with an additional spin-off impact. Direct impacts are products and services supplied directly to homebuyers. Indirect impacts are the makers of raw materials, components, and technologies that serve the direct service providers, such as wood for furniture and computers for Realtors. Spin-off impact is the spending by the direct and indirect service providers that filters through the economy. Of these jobs, 94,700 are generated in the direct round, while the remaining 63,900 jobs are generated to produce the goods and services used by the direct round to provide goods and services to homebuyers.
The jobs generated directly and indirectly through the sale and purchase of MLS homes account for about one in 100 full-time jobs across the entire economy.
In 2006, there were 483,917 residential properties sold through the Canadian Multiple Listing Service.