The real estate agents and brokers industry rebounded in 2019

Released: 2021-03-02

The real estate agents and brokers industry generated $15.6 billion in operating revenue in 2019, up 4.7% from 2018.

Higher borrowing costs and the introduction of more stringent qualifying rules for mortgages in 2018 curbed housing demand. However, the real estate industry bounced back in 2019 as strong labour markets, rapid population growth and low borrowing costs brought homebuyers back to the real estate market.

Operating revenue in Ontario reached $8.6 billion in 2019, up 6.5% from 2018, contributing to the national rebound in the real estate agents and brokers industry. Ontario remained the largest contributor to the industry, accounting for 55.1% of operating revenue nationally.

Operating revenue in Quebec continued to grow at a record pace, reaching $2.1 billion in 2019, up 15.1% from 2018. Real estate activity in Quebec was influenced by many economic factors, including the lowest unemployment rate (5.1%) since data became available in 1976, household disposable income increasing 5.2% in 2019, and affordable housing markets.

However, recovery in the real estate agents and brokers industry was not broad-based. Operating revenue continued to decline in both British Columbia (-4.5%) and Alberta (-0.5%) in 2019.

Operating expenses in the real estate agents and brokers industry increased by 3.8% in 2019. Subcontract expenses continued to make up the largest portion of total operating expenses (35.3%). With growth in operating revenue outpacing growth in operating expenses, the operating profit margin edged up from 29.5% in 2018 to 30.0% in 2019.

Unlike many service industries that were negatively impacted by the COVID-19 pandemic, the real estate agents and brokers industry experienced exceptional demand in nearly all areas of the country in 2020. While the Canadian real estate market had a setback in the spring as the pandemic lockdowns took effect, it recovered rapidly through extraordinary growth in activity during the rest of the year.

Declining mortgage rates played a significant role in real estate activity as they reached all-time lows. Despite rising unemployment and lower immigration, home sales increased as households sought more living space for the new reality of working from home. To date, most real estate associations have reported large increases in provincial home sale volumes and prices for 2020. As such, the real estate agents, brokers and appraisers industry is expected to have reached new heights in 2020, and the annual survey will confirm the financial trends for this record year.

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