Canadian real estate agents must be looking forward to a very jolly Christmas. Statistics Canada (Stat Can) data shows ownership transfer costs, which are primarily sales commissions, reached a record high in Q3 2020. The rate of growth for the segment is now growing 11x faster than GDP.
About The Data
Today we’re looking at ownership transfer costs in Canada. The component is made up of real estate commissions, land transfer taxes, legal costs, and file review costs. It sounds like a lot of components, but the largest (and majority) is actually commissions paid. The second would be land transfer costs, which typically come in at a fraction of the normal rate of commission.
Ownership Transfer Costs Rise Over 137%
Canada’s crippling recession couldn’t get any better if you’re a real estate agent. Ownership transfer costs reached $59.94 billion in Q3 2020, up a seasonally adjusted 137.44% from the previous quarter. Compared to last year, this is 58.45% higher for the same quarter. The quarterly skews growth a little, but even compared to last year it’s huge.
Canadian Ownership Transfer CostsThe dollar amount Canadians spent on transfer costs, seasaonlly adjusted at annual rates. Source: Stat Can, Better Dwelling.
Ownership Transfer Costs Are Growing 11x Faster Than GDP
The quarterly growth for GDP was high – but not even close to transfer costs. GDP grew 11.61% in Q3 2020, compared to the previous quarter. On an annual basis, it’s still down 3.68% from last year. The quarterly growth rate for ownership costs was more than 11x. In fact, it’s grown so much faster it’s now the size of 2.68% of GDP. That crushes the previous record made in 2017.
Canadian Ownership Transfer CostsThe size of ownership transfer costs, expressed as a percent of GDP. Source: Stat Can, Better Dwelling.
It may not have looked possible, but Canada is now even more dependent on real estate. To give some context to how this compares outside of Canada, transfer costs saw 3x the astronomically large quarterly growth in the US. The US is also in the midst of a sales boom.
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