Operating revenue retreated significantly amid 2022 slowdown, report shows
Canada’s real estate agents and mortgage brokers saw a substantial decline in operating revenue in 2022, according to the national statistics agency.
The industry saw its operating revenue fall by 21.8% on an annual basis, retreating from 2021's record high of $26.7 billion to $20.9 billion, Statistics Canada said.
“Large declines in the industry's operating revenues were seen in almost all provinces in 2022,” StatCan reported. “Ontario, which accounted for the largest share of operating revenue nationally (55.0%), fell 25.9% to $11.5 billion in 2022.”
Revenue drops were also registered in British Columbia (down by 27.3%) and Quebec (down by 14.5%) from 2021.
“By contrast, Alberta was the only province to post an increase in operating revenue, growing 5% from 2021 to 2022, fuelled by strong increases in home sales and prices in the first quarter of the year,” StatCan said.
Still, the industry’s operating revenue remained 34.5% higher than pre-COVID-19 levels in 2019.
Canada's mortgage and housing markets may see an upturn in 2024, but the recovery is expected to be gradual, according to Drew Donaldson, founder and CEO of Donaldson Capital.
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 10, 2024
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At the same time, the industry’s operating expenses fell by 15.4% from 2021 to 2022. StatCan reported that subcontract expenses, which cover commission payments to other brokers, continued to dominate as the largest component of total operating expenses, accounting for 37.6%.
“The operating profit margin decreased from 36.5% in 2021 to 31.3% in 2022, because operating revenues declined at a faster pace than operating expenses,” StatCan said.
“Operating revenue in the real estate agents and brokers industry is expected to continue to decline in 2023, as most real estate associations reported continuing weakness in both residential home resale transactions and home prices across Canada.”
