Third time’s a charm… maybe. The latest Canadian Real Estate Association (CREA) shows large revisions for sales numbers. Most regions in Canada will see a drop in sales this year, with BC and Ontario leading lower. The only growth in sales expected are east of Ontario, but next year is looking rosier.

Yes, Forecasting Is (Still) Hard

Just like we said last time the forecasts were released – forecasting is hard. People that don’t do it for a living think you toss in some data into a model, rub a genie’s lamp, and out comes numbers. Unfortunately, it’s not so easy.

Forecasts are based on the information available at the time. That means as a situation evolves, the numbers are likely to change – especially as you get more info. That said, we did say the original forecast in 2017 didn’t make sense, since they ignored changes to credit capacity. Anyway, point is – don’t rag on them too hard.

Canadian Real Estate Sales Forecasted To Drop Over 11% In 2018

CREA expects sales to drop across Canada, even further than anticipated previously expected. The agency is forecasting 458,200 sales in 2018, down 11.2% from the year before. That is even larger than the 9.8% decline they were expecting as recent as September. It’s even bigger than the 7.9% decline they forecasted in February.

Note: The 2018 forecast means December is expected to have just 21,769 sales. That means they’re expecting the fewest December sales since 2012, or they’re lowering the number so it comes in “surprisingly high.” The latter is called sandbagging, and is very popular in forecasting. Not that they would do that intentionally of course.

In 2019, things are forecasted to get better. The industry expects 456,000 sales, 0.5% lower than the 2018 number, and 11.61% lower than 2017 numbers. This is a revision from the 2.1% increase they expected in September.

Canadian Real Estate Sales Forecast

The Canadian Real Estate Association sales forecast for 2018, and 2019 – including revisions.

Source: CREA, Better Dwelling.

Ontario Real Estate Sales Forecasted To Fall Nearly 14% In 2018

Ontario sales are expected to drop even further than previously thought. CREA is forecasting 190,500 sales in 2018, down 13.9% from the year before. In 2019, sales are expected to hit 193,100, up 1.4% from the 2018 forecast. However, it’s still down 12.77% from the 2017 sales numbers.

This is a downward revision from September’s forecast. They were expecting 193,300 sales in 2018, a decline of 11.8% from the year before. In 2019, they were expecting 203,600 sales, up 5.3% from the 2018 number. All forecast numbers were lower than the province’s 2017 numbers.

Canadian Real Estate Sales Forecast

The Canadian Real Estate Association September sales forecast for 2018, and 2019.

Source: CREA, Better Dwelling.

British Columbia Real Estate Sales Forecasted To Fall Over 24%

British Columbia is still expected to have the biggest decline in Canada. In 2018, CREA is now forecasting 78,600 sales, down 24.2% from the year before. In 2019, they’re expecting 74,500 sales, another 5.2% decline from the 2018 forecast. Next year is expected to be a whopping 28.19% lower than 2017’s numbers – ouch.

The province was previously expected to see the largest decline, but it’s even larger. In September, they expected 2018 to come in at 80,700, down 22.2% from last year. In 2019, they expected a further drop to 80,400, down another 0.2% from the 2018 numbers. That was rough, and they still had a downward revision on top of that.

Quebec Real Estate Sales Forecasted To Rise Over 4%

Quebec received a rare upward revision, with better than expected performance this year. CREA is now forecasting 2019 will come in at 86,500 for 2018, up 4.8% from last year. In 2019, the number is expected to rise to 88,400, up another 2.2% from the 2018 number. The 2019 number is up 7.09% from 2017 sales, which is huge growth into rising financing rates…. a little contrary to normal markets.

Previously, the province was expecting lower growth. CREA’s September forecasted 2018 sales would come in at 85,600, up 3.7% from the year before. Sales in 2019 were expected to rise to 85,700, up another 0.2% from the 2018 forecast. The agency is giving these numbers a decent sized upward revision.