Real Estate News

Canadian Real Estate Revenues Plunge Amidst Interest Rate Hikes A 2022 Overview and Future Projections


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The real estate industry in Canada has faced a substantial blow, according to recent data from Statistics Canada. The impact is attributed to the Bank of Canada's series of interest rate hikes over the past few years. The report reveals a significant decline of 21.8% in operating revenue related to real estate agents and brokers between 2021 and 2022. Despite a record-breaking year in 2021, where revenues soared by 38%, totaling $24 billion, the subsequent year saw a sharp dip to $20.9 billion. The Bank of Canada's decision to raise interest rates seven times in 2022, from 0.25% in January to 4.25% in December, contributed to reduced home sales and a downturn in the commercial real estate market.

The impact was not uniform across provinces, with some experiencing more drastic declines than others. Notably, Ontario, which holds the largest share of national operating revenue at 55%, witnessed a 25.9% drop to $11.5 billion. British Columbia and Quebec also faced significant decreases of 27.3% to $3.4 billion and 14.5% to $2.7 billion, respectively. In contrast, Alberta was the exception, posting a 5% increase in operating revenue from 2021 to 2022, driven by strong growth in home sales and prices during the first quarter of the year. Despite the decline in revenues, StatCan notes that the industry's operating revenue in 2022 was still 34.5% higher than pre-pandemic levels in 2019.

Looking ahead, Statistics Canada anticipates a further decline in revenue for the real estate industry in 2023. Affordability challenges, particularly related to borrowing costs, are expected to persist and weigh heavily on both residential and commercial real estate transactions.

Read the full article on: STOREYS


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Amandeep Singh
Amandeep Singh
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