The Economic Impact of Real Estate Transactions in Canada

As the Canadian economy continues to struggle with sluggish growth related to international trade tensions, and the ups and downs of recent immigration policy, it’s important to remember the critical role the housing sector plays in creating jobs and economic opportunities.

From construction activity to the spin-off effects generated from each home sale, the residential real estate industry provides significant, ongoing economic benefits to Canada. Recent research points to the important role that resale home sales plays in supporting jobs and other positive economic impacts. 

It’s easy to understand that new home building and associated activities, like the development of streets, schools, parks and community centres, creates economic activity. Driving by a construction site, you can see the jobs created by observing the construction workers, and when thinking about what it takes to build a new home you can understand how many behind-the-scenes jobs, like architects and engineers, there are. New construction also uses Canadian-manufactured wood, bricks, steel, glass and other materials.. 

But the economic stimulus doesn’t stop when the home is built. 

A home sale through MLS® Systems is a transaction between two parties of a home that was built, sometimes years before. In a good transaction, both parties will benefit—but does this also have spin-off benefits to the rest of us in the economy? Yes! 

According to our recent research at Altus Group for the Canadian Real Estate Association (CREA), which tracks the many ties between resale housing transactions through MLS® Systems and the broader economy, home resales are responsible for close to $46.8 billion a year in economic activity (over and above the actual transaction values).

Altus Group analysed the impact home transactions processed through MLS® Systems have on economic activity and government revenues by studying the 2022-2024 period. 

There has been considerable volatility in the resale market since the time of the previous report, which was completed in 2023 and studied the 2020-2022 period. In response to rapid inflation the Bank of Canada began raising interest rates aggressively in 2022. This monetary tightening cooled housing markets across Canada, apart from Alberta and Saskatchewan. Existing home sales were down during the more recent study period, compared to the 2020-2022 period. 

Inflation, elevated home prices, and growing household incomes supported increased spin-off spending per home buyer over the study period despite the challenges of high borrowing costs and softer housing demand. Consequentially the total economic impact of sales transaction through MLS^® Systems remained significant. 

Our research found that, on average, a typical home sale will stimulate nearly $30,000 in incremental renovation spending (by either the vendor, purchaser, or both). Among all spending categories, renovations contribute more significantly to the economy, as it’s considered a capital investment. And, that’s just one of many examples. 

Each home sale transaction through MLS® Systems generates some $97,500 in spin-off spending through fees paid to professionals such as lawyers, appraisers, real estate agents, surveyors, as well as spending on appliances, furniture, renovations and other items a purchaser may need or want for their new home. 

There were close to 480,300 home sales annually processed through MLS® Systems in the study period. Collectively some $46.8 billion in spin-off spending per year was generated by these transactions, up from $41 billion in the previous study. 

Ontario, being the biggest resale market in Canada ($22 billion), accounted for almost half of that spending. 

The additional spending creates jobs directly and indirectly in the economy. Some 231,500 jobs are generated each year, with finance, insurance, real estate, construction and professional service sectors benefitting most from MLS® Systems home sales. 

Home sales also generate significant revenue for municipal, provincial and federal governments. Resale transactions through MLS® Systems are estimated to have generated $2.5 billion in municipal revenue through land transfer taxes and development levies, and $16.8 billion in federal and provincial tax revenue. 

The Canadian economy continues to face headwinds in 2025, though the volume of resale transactions is generally holding up (down just 4% in the first half of 2025 over the same period last year). Importantly, even if housing sales ease further, the economic impacts from recent sales will continue to provide a boost to the economy, and, given the lags (say, the time between move in, and the decision to undertake renovations), there will continue to be positive impacts on the economy from recent activity well into next year. 

This is a reminder of how important the resale market is to the overall health of the economy in Canada.