Study shows average home sale yields $32,200 in additional consumer spending

Did you know that when you buy or sell a home, you're giving a boost to our national economy? Well, it's true, and just how much real estate sales drive our economy may surprise you. The resale housing industry in Canada generated more than 158,000 jobs and an average of $15.3 billion annually in the period from 2004 and 2006, according to a study just released by The Canadian Real Estate Association (CREA). With the Canadian resale market experiencing record-breaking sales month after month, small wonder the Canadian economy is booming these days.

According to the report released by CREA, 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 on the new home, services, and taxes. From 2002 to 2004, the average transaction yielded $24,697 in additional consumer spending. In the period from 2000 to2002, 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.

Surprisingly, the report only reflects the spending related to the cost of moving from one home to another and for renovations after moving in - but does not include any renovation expenditures by sellers to prepare properties for sale. Since getting your home 'showing ready' is becoming an increasingly important part of the selling process - even to the point of hiring professional decorators or property stagers to maximize buyer appeal - the actual impact of all aspects of the real estate process on the economy would be even higher than reported by the study.

We've all heard reports in the news media of how real estate is a major engines driving Canada's economy. This new 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. CREA's Chief Economist confirms that purchases and sales of homes trigger additional expenditures that have broad economic impacts and job creation is 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.

So, if you're thinking of buying or selling a home in Canada, remember its good business - in more ways than one! If you'd like to know how real estate has performed as an investment in your market, call me to find out more.