The Canadian real estate industry just became a little bearish. The Canadian Real Estate Association (CREA), the trade association representing the country’s agents, has revised their 2018 and 2019 sales forecast. The organization now sees sales falling even further this year, than they did during their prior forecast. Declines are now expected to be over 50% higher than previously expected.
Canadian Real Estate Sales Forecasted To Drop 11% In 2018
Canadian real estate sales are on the slide, and CREA is finally acknowledging it. The industry now expects Canadian real estate sales to fall to 459,900 in 2018, an 11% decline from last year. In 2019 they expect sales to move slightly higher to 474,800, a 3.2% increase from this year’s forecast. However, sale numbers in 2019 will still be 3.96% lower than sales in 2017.
Canadian Real Estate Sales 2018 Forecast
Canadian real estate sales forecasted for 2018, both March and June forecasts.
Source: CREA, Better Dwelling.
To contrast, in March they were much more optimistic. Canadian real estate sales were previously expected to fall to 479,400 in 2018, a decline of 7.1%. In 2019 they had previously expected sales at 496,500, 3.6% higher than their 2018 forecast. We did point out during the previous forecast the decline should be closer to 12%. It’s nice to see them finally catch up.
Canadian Real Estate Sales 2018 Forecast Change
The percent change of Canadian real estate sales forecasted for 2018.
Source: CREA, Better Dwelling.
Ontario Real Estate Forecasted To See Over 35,000 Fewer Sales In 2018
Ontario real estate sales are expected to drop by the most number of units in 2018. CREA is now forecasting 187,200 sales in 2018, a 15.9% decline from 2017. Sales are expected to rise to 198,800 in 2019, an increase of 6.2% from 2018’s forecast. Although 2019 is still expected to be 10.65% lower than 2017. At this time, the forecast likely isn’t modeling any changes to employment due to changes to minimum wage or full-employment.
British Columbia Real Estate Sales Forecasted To Drop Over 17%
The largest ratio of sales expected to decline is in British Columbia. CREA is forecasting 85,400 sales in 2018, a 17.7% decline from last year. In 2019 they expect sales to increase to 88,200, a 3.3% increase from this year’s forecast. Sales in 2019 are still expected to be 14.99% lower than 2019 sales.
Quebec Real Estate Sales Forecasted To Rise Over 3%
Quebec real estate is one of the few markets expected to see sales rise this year. CREA is forecastings 85,650 sales in 2018, a 3.7% increase from 2017. In 2019 the industry expects annual sales to rise to 87,000, a 1.6% increase from this year’s forecast. The 2019 increase would be 5.38% higher than last year’s sales. Quebec and Nova Scotia are the only two provinces the industry expects to see higher sales this year.
Alberta Real Estate Sales Forecasted To Drop Almost 8%
Alberta real estate sales are forecasted to drop for the next two years. CREA is forecasting 52,700 sales in 2018, a 7.9% decline compared to last year. In 2019 they expect sales to drop to 51,900, another 1.5% decline from this year’s forecast. That would bring 2019 sales down 9.29% from 2017’s number. Ouch.
The sales forecast is actually still a little optimistic if you think about for even a few seconds. Residential real estate sales are currently 15.4% lower than they were at the same time last year. In order to hit the 11% decline they are forecasting, the second half of 2018 would need to outperform 2017. Remember, last year had what the industry referred to as a “B-20 mortgage rush.” They attributed a rise in sales in the last quarter to a one-time event. Now what’s the one-time event they’re factoring in now?
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Get out of here with your logic and projections. It was up last year, so it just goes up this year. lol.
In all seriousness though, great observation.
Gotta love the number Jockeys; prop up the false narrative until there is literally no way to smooth/explain the numbers. It’s like they yell ‘look a cat’ until everyone is looking at them cock eyed saying ‘but that’s a fucking dog? are you stupid?’ AND they have the balls to suggest there will be a bump in sales (i.e. more demand = higher prices, well not really but…). I guess if we avoid a massive recession and then the US misses theirs(Junk Debt is sooo bubbly along with housing), oh and Europe could be burning if there is a trade war with Donny Douchenozzle…and China’s financial markets are a shit slurry and only getting worse after getting the Big D…so where is the demand? Where are the sales? Oh wait, CREA is going to change their tune next spring and blame their inability to forecast on ‘unforeseen economic conditions’….Shocker. BD4L.
Great post, Blue.
CREA is changing their forecasts all the time, I don’t know why people even take those forecasts seriously, however the fact that they downgraded it tells us something which this BD article pointed out.
Unpredictability is certain.
Year after year, the tribalism of Bulls vs Bears just gets more and more intense. But one that I have kept in mind is the good ol saying…
“First they ignore you, then they laugh at you, then they fight you, then you win”
couldnt be any more true because articles like this would be full of the bears, and a whole lot of fuck all from the bulls, 2-3 years ago I started seeing the bulls poke fun at “poor people” that didnt buy. Now read the comments and the bulls are fighting with aggression in all caps saying “ITS ONLY SALES…. NOT PRICES”
sounds like were reaching the end of the market cycle. if you guys are even aware that markets move in cycles
Rather than fighting about nonsense, why not explore why the market could decline in volume of sales? Why not look at the areas with the declines and the nature of the buyers and sellers in those areas. Which segment is in decline? Is it only condos, only apartments, single family detached homes, home near the core, homes in the exurbs? All markets across the nation are not experiencing the same decline in the same time frame.
Rick Abrams,
where do you get your numbers from? Personally I’m not a real estate agent that has access to the MLS of all the history of final sales prices etc. The regular people have to put their trust into the release of numbers from central planners, banks and people in the real estate industry that have an interest selling the idea of of a healthy market by picking and choosing which charts work best for thier narrative.
If you have any reliable sources where I can get all that crucial information of need to do some proper research, I’d like to know. Thanks in advance
Start with zolo.ca (Market Stats) section. It will give you pretty nice breakdown for all GTA or Greater Vancouver regions.
Don’t trust their “Pro-Rated” numbers but finalized stats should be OK.
mongohouse.com daily sold prices posted next day. Only site not blocked by recent ruling as I believe it is domiciled overseas to woo foreign investment. Either way, who cares, you can still see what is selling and what is going stale. I have no vested interest in the site, but I do check it daily for price information in the west end.
Thanks for sharing this site. I took a look through Beaches/Leslieville and am seeing homes sold for 150% over asking. Is this legit? How are homes selling for hundreds of thousands over asking in this market? Like who is willing to toss around an extra $300,000 on a gross house? I don’t get it.
I have received three unsolicited calls from RE agents in the past nine days. First time getting agent calls in distant memory.
One had obtained my contact info from an open house I visited on a whim a few years ago – she was calling to tell me she is listing another house on the same street. Never heard from her in the intervening years.
The other two were complete cold calls. Last week’s asked if I was planning on selling anytime soon. This morning’s agent asked if I knew anyone who would need help with real estate in the coming year. I said that that is a broad question for which I will not provide an answer and promptly asked her how she got my number as it is on the do not call list. She said from public record, and ask if I would like her to take her off her call list. Ya’ think? I then promptly filed a complaint with the National DNCL body.
Another indication, perhaps, that the wheels are finally starting to fall off the Toronto RE market?
Low sales = less pie = less $ for agents = desperation = cold calling/extra follow ups after showings/asking ‘why can’t you bring an offer’/looping back weeks later to see if interest has changed/realizing your entire worth other than basic contract is essentially zero/time to get a new profession.
Bahaha…sorry, not RE but just read this on lunch (link below…nothing new to many of us)…you will see the canaries here…CDO = CLO and really bad RE debt = really, really,really bad corp debt. This is like 1989 and 2008 fucking rolled into one retarded love child because housing is also having a problem. What am I ranting on about? Some seem to think the US is in good footing and we can skirt a recession by just keeping our heads down and riding the wave to the South (most of us know the numbers coming out of the US are a fugazi…). Then, similar to 2008, we’ll be ok if/when the US does falter and naively investment/money will come here as a save haven.
Cheap credit is pure evil because we don’t have the moral compass as a society to NOT eat too much, puke and then eat the puke. 50 years ago, people had a basic understanding of humility, working hard and building wealth over time not always trying to be ‘better’ than others in a short term FOMO nature. “Sally got a benz/vacation/house, I need one NOW!” Social media feedback loops are making everyone think they need to compete but here’s the rub: there is no competition and at the end of the day, when you’re in your pine box, no one cares. BD4L.
https://wolfstreet.com/2018/06/22/this-is-proof-the-junk-credit-market-is-still-irrationally-exuberant/
Haha Bluetheimpala, I love the hook into the social media loops. I work in the web industry and that is a factor I thought very few considered; It’s a REAL factor! Your mention of the hedonistic ‘consume without restraint’ psychosis of people fueled by cheap credit — is the *most likely* ‘intangible’ that constantly eludes discussion.
A conversation with a car sales guy taught me how common this mindset is when he INSISTED:
SALES GUY: “How much can you pay per month?”
ME: “Who cares, how much are you selling the car for?”
SALES GUY: “How much can you pay per month?”
ME: “What is the interest rate? I want to know what I’m actually PAYING for the car.”
SALES GUY: “Confused look. [Nobody cares, why don’t you just tell me your maximum payment like everyone else.]”
He stuck to it till I just walked out of the office. So how many people bought houses on the pretense of a monthly payment?
I have so been there Dylan. I also was amused by the reaction I got when I asked what the 10 year fixed rate was for a mortgage. He hardly knew how to find out.
Dylan, I was actually taught that in sales training lol.
Lots of ppl buy based on payment. For a car that may be okay but not a house.
That’s nuts! Can’t say I’m surprised though, if people buy that way, people will sell that way.
Prices follow declining sales. PERIOD.
It’s a basic rule of markets, because if you gotta sell then you gotta sell… and if no one is buying you drop your price (pants?) to get the sale. Believe it or not, some people HAVE to sell and no one HAS to buy.
Check out the stock market Dow Jones today. There is a very good illustrative lesson in it.
http://money.cnn.com/data/markets/dow/
Over 50% of trades are now done by computer algorithm. So what does this mean?
The market fell to just above 24,250, and then went suddenly up. Computer ‘buy’ triggers kicked in, until the market hit 24,350. Someone obviously bought at this level, and then the market continued down to below 24,200. Again, computer ‘buy’ triggers caused an up-tick to just under 24, 250 and there were trades made at this level. Then, it went on its own merry way down again. Yes, there is still stupid exuberant money in the system, that is looking for a place to be consumed. People are still ‘buying high’, even in a steadily declining market.
The moral? Computers using the best of algorithms, models, and data analysis thought the market had bottomed out, and bid prices higher (self-fulfilling prophecy) but the market did not care, the fundamentals (the REAL business climate in America, not the gobbledygook the financial pundits claim) just are not there. America is in decline, and the recession is closer than it may appear. The financialization of the American economy has run its course, and the era of making money on money has come to a disastrous but inevitable conclusion.
For six months, the market held flat and relatively stagnant, except for computer trading volatility. Will it stay flat and stagnant, or will it collapse? There is one thing for sure, the market is NOT going to go up in any significant way. Yes, smart money investors have found a way to make money on short-term trades by sucking in the stupid money, but how much stupid money is out there?
Is this being echoed in the real estate market in Canada? Exactly how much stupid money is left to be had? Even exuberant money dries up sometime.
So, flat market for decades, or severe drop and then recovery to the same level?
And the investors? They will buy up lunar and Martian opportunities instead, just like they invested in America in the 1850’s and after, when Europe stagnated and flat-lined. (Actually, the realistic opportunities are in Asia.) But wait, didn’t this lead to a few disastrous wars when Europeans got very jealous of American progress and European stagnation? Strange how countries get very upset when another country makes more economic progress than they do. Not FOMO, but worse, Panic At Missing Out, and then downright Anger At Missing Out.
But when iconic Harley-Davidson announces that they are leaving America, the signal is unambiguous.
You came to a conclusion that there will be a recession because a quant algo bought some stock???? LOL
When even CREA turns bearish, the jig’s up folks.
Yup, like the saying goes “If your momma says you ugly, daaaammmnnn you ugly”
“but for condo market even 2-3% growth should be considered as insane” sure it is …….
I get the feeling this insane growth might be slowing my troll. LOL, good luck off loading your junk!
https://www.bnnbloomberg.ca/toronto-housing-chill-may-soon-extend-to-high-flying-condo-market-1.1097195
Even more good news for investors in wait from the CBC! sorry LL, Real estate board says sales are heading down ……
https://www.cbc.ca/news/business/crea-home-sales-forecast-1.4707523