Canadian Real Estate Provided Over 10% of GDP Growth

Canadian real estate’s economic contribution was slowing, but it’s back with a vengeance. Gross domestic product (GDP) made a big jump in October, with real estate doing a lot of the heavy lifting. A component, real estate and rental and leasing (RERL) provided over a tenth of the monthly GDP increase. RERL showed the biggest growth since last year.

Canadian Real Estate Rental and Leasing

Canadian real estate significantly boosted the economy’s growth last month. In October, the RERL sector reached $266.1 billion at the seasonally adjusted annual rate (SAAR). It is 0.8% higher than a month before, and the biggest growth since December 2020. Good for real estate. It really needed a win.

Canada’s GDP advanced at a similar rate of growth. Total GDP reached $2.0 trillion in October, up 0.8% from a month before. Just over 12.1% of those points were growth from RERL. It’s worth remembering this isn’t the total contribution real estate makes to GDP. Industries like construction, 14% of growth in October, are dependent on housing.

Canadian Real Estate and Rental and Leasing As A Percent of GDP

The share of Canada’s gross domestic product (GDP) that comes from the real estate and rental and leasing sector.  

Source: Statistics Canada; Better Dwelling.

Canadian Real Estate Represents At Least 13% of GDP

Canada is still dangerously dependent on real estate for economic growth. RERL was 13.3% of GDP in October, down from the peak of 14.8% in April. Despite the smaller share, it’s still a large amount.

Real estate has shown more aggressive growth than GDP. Just RERL has grown 20% faster than GDP since 2005, on average. Once again, it’s a fraction of real estate’s contribution to Canada’s economic output. It’s still an astronomical number.

Canada used real estate to juice its GDP numbers before the pandemic. Now it’s using it to help drive the recovery, making the economy even more dependent. Mind blowing, since Canada depends on real estate even more than the US during the world’s most destructive real estate bubble.



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  • RW 2 years ago

    Canada won’t rest until half the country is retired, and the other half works to convince people from around the world to come and pay for expensive housing so they have a job.

  • Adam 2 years ago

    13% RERL and what’s the rest? 10 points construction, 10 points finance, 2 points professional services, 5 points agriculture? This sounds like Canada isn’t twice as dependent (as the article linked suggests), but even more dependent on real estate than the US bubble.

    It’s not a bubble, because that’s the whole economy. LOL

  • Cholds 2 years ago

    At this point, most of the country is starting to resemble the worst affected parts of Japan during their legendary asset bubble. They had a fall of up to 90% in housing prices in the most in-demand areas (among other worse falls in other assets).

    It might not have caused problems for the whole world, but it did stall their economy for decades. Fortunately for us, nobody is predicting tha…..oh wait….

    • Chang Xiu 2 years ago

      To be fair they’ve been predicting for 12 years

      • Trader Jim 2 years ago

        That’s on you if you’ve been listening to Daniel since he was 14.

        Economic growth is still at 2019 levels per capita, but the average person isn’t smart enough to realize it as long as they have paper gains that justify higher property taxes.

    • RM 2 years ago

      I am absolutely a real estate bear but, also in fairness, Japan has a low birth rate and no immigration so I don’t know how well it compares.

      • RW 2 years ago

        Japans birth rate and immigration slows down with their adoption of low interest rates, it didn’t happen first. Who wants to move to live in a tiny box where you’re expected to work well into your 70s to maintain that lifestyle?

        It’s great as a novelty, but there’s a reason Japan has this issue, and it’s not because people are really depressed about the lack of immigrants. It’s because youth see little options in their future.

  • Jimmy 2 years ago

    I understand all the information being presented, have been following BD since 2016, and have been hearing bearish stories in the BD comments section on real estate since then. The fact is, had I purchased a home anywhere in Canada in 2016, I would have made a k!lling. I guess I’m now indifferent to these bearish stories. Our country hasn’t fallen apart as anticipated based on all the comments throughout the years.

    The fact is, no one can predict the future. All the “Canada real estate bubble is going to burst” posters may end up being right, but their accuracy has been horrendous. Of course they’ll eventually be right; there’s always a burst, it’s just the way it is. In the meantime, these same posters missed out on 100%+ gains over the last 6-7 years because “the housing is in a bubble” theory hasn’t come true yet. Now they’re sour grapes because they miscalculated monumentally and have to live in a house/apartment they don’t want to live in with people they’d rather not have to live with. Also, the effect of the internet wasn’t properly calculated this time around. That’s one of the major factors in current house prices being what they are. In the past, housing may have taken years to correct. However, because the internet changed the speed of house purchases/accelerated house prices increases so much more quickly during this housing bull run, expect the internet to play a major factor in dropping house prices in record speed as well. It works both ways.

    Those of you newbies reading BD, I have 2 pieces of info I’d like to share:

    1. Do what you can to find a home/place of dwelling in an area you love, in a home that you can eventually love (might need upgrading), that you can see yourself living in for years. That way, if/when housing eventually drops, you won’t be affected mentally by the house price being significantly lower when you purchased. It’ll just be a placeholder, an illussion. You’ll get the value back eventually, home owners always do. And 20 years after purchasing, that’ll surely be the case. But you’ll need to stop looking at your home’s price and those around you as soon as you buy it. Otherwise, you’ll go nuts.

    2. Try to accurately determine the likelihood of your investment (sadly, housing now has to be looked at as an investment) plummetting. Do you feel it’ll be next year, a few years down the road, or 10 years from now? Base it on stats and your gut instinct. It’s an impossible task, but since this is likely the biggest purchase in your life, it’s worth trying. Further, how much money would you be good with losing? Don’t look at how much you can make. That’s the wrong way to go about it. Always look at the downside risk.

    To my fellow Canadians, good luck in your housing situations. I only wish all of you the best. Strange times in the housing market for sure.

    Merry Christmas and a Happy New Year.


    • Mortgage Guy 2 years ago

      If you’ve been reading BD this whole time, you must have missed the part where they present data.

      CAGR on single-family”
      – Toronto 7.6%
      – Vancouver 3.6%

      CAGR on stock market:
      – NASDAQ: 23.9%
      – S&P 500: 11.8 %

      The stock market has no transaction fees, and many ETFs outperformed housing,.

      Sometimes housing is a bubble. Sometimes everything is a bubble. When it’s the latter, make sure you understand you’re not making money because you’re smart.

      Everyone is making money, middle class people are just patting themselves on the back while earning a fraction of what the other half is earning.

      • Scott 2 years ago

        I’m an Ontario school teacher and your numbers don’t make any sense… to me. Therefore Canada’s housing market is in perfect shape and prices will continue to rise until I need to or want to sell. And my new boat’s name is “Tiff”…

        • Trevor 2 years ago

          I know you’re joking, but for people that don’t realize what he’s saying, you won’t get Tiff the boat. You’ll get a $1 million bungalow, and not realize rich people have $10 million homes now.

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