Real Estate Becomes Canada’s Largest GDP Contributor

In the latest GDP report covering the Canadian economy for the month of May 2016, statistics have revealed that the overall Canadian economy took a 0.6% drop from the previous month. However, the report indicated that the Canadian housing market showed no signs of slowing down when it came to generating revenue. The housing boom the market has been recently engaged in has transformed it into the country’s largest GDP contributor, accounting for up to almost half of the nation’s GDP during May.

TD economist Brian DePratto, revealed to the Business News Network (BNN) that:

“If you go back and look at all those monthly GDP reports, even though real estate is the third biggest – it’s only about 12.5 per cent of the economy – it was responsible for about half of the growth on average over that time, so really an outsized contribution from that sector on that longer-term basis,”

News of the real estate market’s recent phenomenal performances can still be put in greater perspective. BNN went on to reveal that that the real estate market’s closest competitor in May 2016 was the manufacturing industry, which was still outpaced by over $47 billion. The real estate industry also reportedly grew by roughly $7 billion from just a year ago.

The sector has now grown by an impressive 3% since 2015, and approximately 6.8% from 2014. The real estate sector alone is estimated to be valued at $218 billion.

The Canadian economy’s overall dip and the magnitude of the real estate market’s contribution can be largely attributed to the decline in oil prices. According to Bloomberg, the drop in price in such a valuable commodity has deducted up to 1.7% in Canada’s GDP in the two years leading up to May’s GDP report.