Unlike other worldwide real estate markets, the Canadian market held steady over the recession.
New York, NY (PRWEB) March 28, 2014
Compared with the significant volatility experienced in real estate markets worldwide over the past five years, the Canadian real estate market remained stable due to strong underlying fundamentals. “Appreciating real estate values boosted industry commissions' revenue over the past five years as demand for residential and commercial real estate rose and pushed up prices, albeit at a slower pace than the previous five-year period, due to the effects of the recession,” according to IBISWorld Industry Analyst Stephen Morea. At the same time, the Canadian government took steps to restrict housing supply by tightening already tough lending standards. This move prevented the severe drops in housing values and related household wealth experienced in other developed economies and allowed real estate prices to rise steadily, particularly in urban markets. As a result, revenue for the Real Estate Sales and Brokerage industry is expected to increase at a 3.0% average annual rate over the five years to 2014 to about $12.1 billion.
In 2014, IBISWorld expects modest improvement across real estate segments, with an anticipated revenue increase of 4.4%. “A growing, aging, urbanizing and progressively wealthy Canadian population will boost residential real estate demand, particularly in major cities like Toronto and Montreal, as well as in resource-rich and high-growth Western cities like Vancouver and Calgary,” says Morea. In the commercial market, restricted development will keep vacancy rates low and prices stable, while growing demand will be underpinned by overall corporate profit and economic growth and falling uncertainty levels. However, persistently high unemployment and new regulations will continue to weigh on industry revenue and profit growth.
The industry is expected to continue performing strongly over the five years to 2019. Fundamentals will remain strong; steady demand growth in residential and commercial markets and restrained but expanding new real estate supply growth will spur increases in industry sales volumes and commissions. New market entrants will also expand the industry's capacity and further boost industry revenue. However, the Real Estate Sales and Brokerage industry will continue to face competition from lower-priced online real estate brokerage and listing websites that will slowly erode average industry commissions and profit margins.
For more information, visit IBISWorld’s Real Estate Sales and Brokerage in Canada industry report page.
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IBISWorld industry Report Key Topics
The Real Estate Sales and Brokerage industry sells, buys or rents real estate for others. Industry operators do not own the property, but act as intermediaries between owners or sellers and buyers or tenants.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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