HOUSING BOOM SPINS OFF $10.8B

ANNUAL EXTRA SPENDING It has also created 120,000 jobs, new report says

Sales of existing homes generated 120,000 jobs and fueled extra spending of $ 10.8- billion annually on average between 2002 and 2004, according to a study prepared for The Canadian Real Estate Association.

The study provides evidence the housing boom has been a powerful locomotive for Canada’s US$1.1-trillion economy over the past few years. “ The study shows the tremendous economic impact of the housing industry, outside of the actual cost of the home,” Gregory Klump, chief economist of The Canadian Real Estate Association, said in a statement accompanying the report.

“When Canadians move, they typically buy new appliances or furnishings, and renovate in various ways to tailor their home to their specific requirements,” Mr. Klump said.

The report, by Clayton Research, says each house transaction on the Multiple Listing Service generated an average of $24,697 in additional spending over 2002- 2004.

This included the purchase of furniture and appliances, moving costs, renovations, services, taxes and professional fees but did not include the cost of any pre-sale sprucing.

That was a significant bump up from a similar study published in 2003, which found an average of $19,760 in ancillary consumer spending over 2000- 2002.

The increase likely reflects higher costs as well as in an increase in the number of properties sold. There were 461,112 residential properties sold through MLS last year, beating the previous record set in 2003 by more than 6%.

The economic impact of each MLS sale varied from a high of $27,873 in British Columbia to $16,896 in Atlantic Canada. The report notes the spending only relates to the cost of moving from one home to another, and does not include any renovation expenditures by sellers to prepare properties for sale.

Renovation and yard improvement generated a big boost in spending, the report said.

Canada- wide, owners of recently purchased homes spent $4,449 on renovations over the first three years after the purchase.

Furniture and appliances amounted to another $ 3,433, general household products $1,409, moving costs $714, professional services $ 13,1 44 and taxes $ 1,548.

As for job creation, some 41,600 or 35% were created in the finance, insurance and real estate industry over 2002- 04, another 21,200 or 18% in professional services such as lawyers, appraisers and surveyors.

The construction industry accounted for another 13,800 or 12%, trade some 18,300 or 15%, and manufacturing 7,800. The other 14% was in a variety of other sectors.