Residential real estate is big business, and not just for realtors raking in hefty commissions in Canada’s hottest housing markets.
Of every 18 people working in Canada, one has a job that’s in some way related to residential real estate, according to a new report from the Canadian Home Builders’ Association (CHBA).
These workers raked in $58.5 billion last year, says the association’s 2015 Economic Impacts of Residential Construction report, published today, up from $50.8 billion the year before.
“At a time when many sectors of Canada’s economy continue to be challenged, it is reassuring to see that residential construction continues to be an important source of jobs, incomes and economic activity in every community across the country,” says Kevin Lee, CHBA’s CEO.
Renovation and repair alone accounted for 595,516 jobs from coast to coast in 2015, the biggest bulk of residential real estate employment, netting workers $34.2 billion in wages.
Meantime, new home construction jobs, whether they be on- or off-site positions, numbered 416,356. These employees took home $24.3 billion last year.
At July’s rate of building, contractors were on pace to start construction on 198,395 homes in a year, according to the latest data from Canada Mortgage and Housing Corporation.
Robert Kavcic, a senior economist at BMO, noted that’s “almost bang on the 10-year average for the country overall” in a research note today.
But booming condo construction on the west coast has BC’s housing starts trending at 45 per cent above the average for the past decade, Kavcic said.
As the Canadian energy sector — one of the long-time pillars of the country’s economy — struggles, real estate has taken on a bigger role in terms of employment.
But while building-industry types may be buoyed by this year’s figures, one economist recently flagged what he called the Canadian economy and labour market’s “over-reliance… on the clearly unsustainable housing boom.”
Paul Ashworth, Capital Economics chief economist for North America, made the comment in one of the firm’s recent reports.
Ashworth says 4.6 per cent of the Canadian population is working in construction, dwarfing 2.6 per cent share in the US. In the year 2000, both countries had 3.2 per cent of their populations working in construction.
“If you believe the current housing boom and elevated pace of condo construction can continue indefinitely, then this is nothing to worry about,” says Ashworth of increased economic dependence on construction employment.
“If like us, however, you think that the boom is ultimately unsustainable, then there is plenty of cause for concern,” he says.
Looking ahead, CHBA isn’t expecting to see a repeat of 2015’s year-over-year industry growth, a spokesperson told BuzzBuzzNews in an emailed statement.
“Given global economic uncertainty, it is unlikely that economic impacts of the industry as a whole will be much larger in 2016 than in 2015,” they said.