With Statistics Canada announcing that the economy took a 0.6 per cent hit in May, real estate has emerged as the third largest component of the Canadian economy, accounting for half of all GDP growth.

“If you go back and look at all those monthly GDP reports, even though real estate is the third biggest – it’s only about 12.5 per cent of the economy – it was responsible for about half of the growth on average over that time, so really an outsized contribution from that sector on that longer-term basis,” TD Economist Brian DePratto told BNN on Friday.

According to Statistics Canada, real estate currently ranks behind industry and the public sector. And while it only grew by 0.1 per cent between April and May, it swelled by a staggering three per cent between May 2015 and May 2016. The sector, which encompasses everything from industrial properties to family homes, is currently valued at $218 billion.

DePratto says that hot resale markets in Toronto and Vancouver are significant factors in the sector’s growth. It remains to be seen how Vancouver’s new 15 per cent tax on foreign buyers will affect the Canadian economy.

“We don’t have any experience with this type of tax in Canada,” DePratto says. “We have to look internationally: places like Australia, Singapore Hong Kong that had similar issues and instituted similar taxes. And what we see there is that it does have an impact. It’s not generally a large impact, but it does slow things down a little bit.”

DePratto believes that the new tax will take an edge off Vancouver’s scorching real estate market.

“But I wouldn’t suggest that it’s going to be big reversal or anything like that.”