The transactional costs of buying and selling homes makes up almost 2 percent of Canada’s economy, according to this very insightful analysis of Canada’s real estate market by the CBC.

That’s a pretty stunning figure, more so when you take into account that agriculture, forestry, fishing and hunting combined only made up 1.6 percent of Canada’s GDP between May 2016 and May 2017. Back in 2009, at the peak of the North American financial crisis, real estate fees only contributed to 0.8 percent of the country’s GDP.

When you buy a house, your real estate agent usually receives two to 2.5 percent in commission from the seller of the house — the agent responsible for selling the house also receives roughly 2.5 percent from the sale. On a $1 million home, that amounts to $50,000 in realtor fees.

Legal fees to close the transaction can sometimes be up to $1000, and then you have land transfer taxes — the amount of money you need to pay the government for the purchase of your new home. In Toronto, your land transfer taxes for the purchase of a million-dollar home end up being $32,950 — half of that goes to the city, the other half to the province.

Earlier this year, the Ontario government released a budget projecting that land transfer taxes alone will surpass $3 billion this fiscal year (or 0.38 percent of the province’s GDP), a remarkable increase from the $1.8 billion earned just three years ago.

The fact that services associated with real estate transactions make up an estimated 1.9 percent of Canada’s GDP suggests that Canada is heavily reliant on movement in the housing market to fuel the economy.

That could be a problem in the very near future. Since the Ontario government’s imposition of a set of rules designed to tame Toronto’s hot housing market, there has barely been any movement in the city’s real estate market. Home sales are currently the lowest they have been in eight years — listings have surged, and buyers seem to be biding their time, waiting for prices to go down even more than they already have.

According to Macquarie analyst David Doyle, our southern neighbours were heavily dependent on home ownership transfer fees back in 2005, when the country’s real estate market was peaking. But even then, those fees made up only about 1.5 percent of U.S. GDP. Now, transfer fees make up less than one percent, Doyle told the CBC.

As a sector overall, real estate, rental and leasing made up 12 percent of the country’s GDP last fiscal year (May 2016 to May 2017). But if you include industries associated with real estate like construction of new homes, home renovations, and the purchase of essential appliances for a new home, that number comes closer to 20 percent.

Canada’s economic growth greatly exceeded expectations in May, with GDP growing by 0.6 percent that month, bringing annualized growth to 4.6 percent. The growth however, was primarily driven by a boost in the manufacturing and mining sectors, with real estate taking a back seat.

“But with the housing market going from bad to worse, and a price correction coming we don’t think the economy will sustain this fast pace this year,” wrote Capital Economics’ Senior Economist, David Madani in a recent note.