March Labour Force Survey Preview: Jobs at Real Estate Agencies Steady Amid Falling Home Sales
Payrolls at real estate agent and broker offices remain elevated
Canadian homes sales have taken a hit in recent years. As of February, sales of existing homes were 12% below their 10-year average, and more than 20% lower than their mid-2016 peak. However, so far these developments haven’t hit the jobs potentially most vulnerable to a slowdown in home sales: positions at real estate agencies and brokerages (which include real estate agents and brokers, as well as other support staff).
Job growth at these establishments well outpaced the rest of the Canadian economy as existing home sales ramped up after 2014, continuing even after sales hit their peak. By May 2017, payrolls at real estate agencies were up 18% from the start of 2014, compared to 4.4% growth across all industries.
Jobs at real estate agent offices finally plateaued in mid-2017, and as of January 2019 have remained fairly elevated. Overall, the impact on jobs has been muted compared to the fairly sharp drop in sales activity over this period. This is particularly the case in British Columbia, where home sales have fallen especially far from their earlier peak, yet payrolls of real estate agencies and brokerages hit a new high in 2018.
Elevated house prices and household debt have consistently been cited as one of Canada’s main domestic economic vulnerabilities, and government policies to address these issues have contributed to a slowdown in home sales. However, so far there have been limited knock-on effects on jobs in the subsector potentially most vulnerable to fewer home sales: real estate agencies and brokerages.
Some workers in the industry might be focusing on non-residential properties, or helping renters find apartments. Still, it could be tough for real estate agency payrolls to hold up if home sales don’t eventually rebound. We’ll be watching closely in this Friday’s Labour Force Survey for signs of shifting momentum across broader real estate and financial industries.
We track job numbers of offices of real estate agents and brokers (NAICS 5312) using Statistics Canada’s Survey of Employment, Payrolls, and Hours (SEPH) through January 2019. While the Labour Force Survey is timelier than SEPH, the monthly figures are not broken down in sufficient detail by industry to track real estate agencies and brokerages.
Brendon Bernard is an Economist at the Indeed Hiring Lab, focusing on the Canadian labour market. His research interests include analyzing how detailed trends in the job market fit in with broader developments in the Canadian economy. Brendon was previously an economist with Department of Finance Canada, where he focused on analyzing Canadian financial sector policy and the U.S. economy. He holds a Master’s in Economics from the Vancouver School of Economics at University of British Columbia, as well as a Bachelor of Arts (Honours) from Queen’s University.