The Canadian Real Estate Industry’s Forecast Expectations Are Crashing

Expectations from Canada’s largest real estate bulls are crashing. The Canadian Real Estate Association (CREA), the organization that oversees Realtors, released its latest quarterly forecast for home prices in 2023. Most markets are now forecast to see home prices contract this year, but that’s not the biggest takeaway. Expectations from the industry rapidly collapsed as the market changed, showing just how big the swing in narrative around Canada’s real estate prices has been over the past year. 

Canadian Real Estate Prices Get A Major Downward Revision In 2023

The industry’s forecast for Canadian real estate prices got a major downward revision. Home prices are forecast to have an average sale price of $662,103 in 2023, down 5.9% (-$41,513) from last year. Not the largest decline, but still a forecast contraction of home prices. That’s a big difference from where the industry was just a few months ago. 

Just in September, the quarterly forecast didn’t expect a contraction at all in 2023. Since then, the forecast has fallen 8.3% (-$59,711)—a rapid change in perspective. The swing didn’t just suddenly occur though, the industry was completely blindsided by how quickly buyer sentiment collapsed after interest rate hikes. 

Canada’s Real Estate Industry’s Expectations Are Plummeting

CREA housing forecast for the average sale price in 2023, as stated in its March 2022, Sep 2022, and January 2023 reports.

Source: CREA; Better Dwelling.

How rapidly did that change throughout the year? Since the start of last year, CREA’s national forecast has come down 18.4% (-$148,831) for 2023. A huge adjustment from what they saw before interest rates started to rise, and now. Don’t be surprised if the forecast continues to come down as the year progresses, or if recession appears. 

Ontario Real Estate Forecast Dropped Over 24% From Last Year

Ontario is expected to see the largest price correction, which makes sense since it saw the biggest boom. Ontario’s average sale price is forecast to fall to $850,876 in 2023, down 8.7% (-$81,080) from last year. The forecast is 9.8% (-$92,183) lower than they had anticipated in September. Since the start of last year, Ontario’s 2023 forecast has pulled back 24.2% (-$274,698). Can expectations crash? Because if so, the more than twenty point drop fits the definition of a crash. 

BC Home Price Forecasts Are Coming Down Fast Too

British Columbia (BC) was previously forecast to see the largest correction, but it’s seen doing better than Ontario now. The average sale price is forecast to fall to $926,705 in 2023, down 7.0% (-$69,752) from the previous year. The forecast is 7.3% (-$72,461) lower than expectations in September. Since the start of last year, the forecast has come down 13.0% (-$138,935). A large adjustment of expectations.

Canadian Real Estate Price Forecast

CREA forecast (Jan 2023) for the average sale price of a home in 2023.

Source: CREA; Better Dwelling.

Alberta Real Estate Still Forecast To Grow, But Expectations Cooled

On the flip side of the declines is Alberta, where minor growth is enough to top the growth forecast. The average sale price is forecast to drop to $452,313 in 2023, up 1.1% (+$4,921) from the previous year. It’s a big change from September, with expectations pulling back 1.5% (-$7,120). The current forecast is 9.3% (-$46,528) lower than they had forecast at the start of last year.  

It’s easy to think we’re highlighting how out of touch the industry is if you don’t understand forecasting. However, forecasts are expectations based on a snapshot of the current environment. They change as the market does as well. Over the past year, there’s been a lot of sudden changes.  

Really, the big takeaway is how quickly expectations in a market can change. At the start of last year, few people believed home prices would only go up. It doesn’t matter how often it occurs, people will always think “this time is different.” Until it isn’t.  



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  • Jessica 1 year ago

    and they’re paid to have bullish expectations, so prices are going to fall much further IMO

  • Jason Chau 1 year ago

    Private healthcare dropped in Ontario this morning. IIRC people used to say home prices in Canada are cheaper since they come with healthcare. That’s not really the case now, so what’s the reason? Just everyone feels like they want to pay 40% more than in the US?

  • Van Realtor 1 year ago

    How much of CREA’s forecast is an actual forecast vs trying to direct people to a price with inflated expectations? Hard to see prices only falling slightly by year end when it’s already been communicated we can’t see interest rates fall this year.

  • KMP60 1 year ago

    I think they’ll need to keep adjusting their forecasts. Everything will keep dropping until the math starts mathing…..and it’s a long way from mathing. Look at the average household income, look at rates and look at prices. Nothing lines up. So, either rates need to fall (they won’t), incomes need to rise dramatically (they won’t) or prices need to fall dramatically (they will….this is called capitulation in bubble speak). Same as every other bubble….it’ll drop below trend and slowly ease back up. But this bubble was so huge, to say this thing will bottom in a few months is wishful thinking in my mind. This will take years in my opinion. The RE people will keep perpetuating the supply myth which has been debunked over and over. They’ll also hang on to the immigrant narrative…but high immigration didn’t stop the 90’s pop and it’s not going to save this one either.

  • Doomcouver 1 year ago

    Rush to the exits incoming…….

  • Yoroshiku 1 year ago

    “Ontario’s average sale price is forecast to fall to $850,876 in 2023…” $850K is still a big number for a average person earning an average income. Still, I think things are moving in the right direction.

    I do wonder what will happen to prices when the BOC starts dropping interest rates again. Will the frenzy start up again?

  • Kim 1 year ago

    They’ve lied through the boom so why not through the bust.
    I laugh at how they come up with their percentage comparisons.
    Its a lot larger decline up to now then they are admitting.

  • Woolsock 1 year ago

    If Canadian RE really does collapse into a massive sinkhole of its own making, I hope we take a really close look at the real-estate industry in this country. It seems to me that this industry has always rejected and resisted external oversight, insisting instead that they will police themselves.
    Oh, I know, they received the minimum of 12 full grades of education, they’ve written a board exam, AND signed a code of conduct. A code of conduct! So that makes them fully equipped and qualified to pilot a pretty significant portion of the Canadian economy? I mean, continuous years of blind bidding wars were in the best interest of whom?
    They keep trying to deflect the blame to the BOC, OSFI, immigration, stress-tests, or JT, or whom/whatever, but this is happening on their watch, in their own wheelhouse and they wanted full control. I’m sure there’s a lot of nice, smart realtors, but they’re being completely sullied by the rest. I can’t think of an industry other than RE that provides such incredible opportunities to succumb to greed without the potential for serious moral or legal recourse.

    We’ll see how private healthcare goes in Ontario, though. That might set a new low.

    • François 1 year ago

      Was it on this blog that I read that most would be going back to their original occupations: car sales, bartending or stay at home mom? The industry’s incomes were out of proportion with reality.

  • J 1 year ago

    675k/4.5 = 150k income /lmao good luck finding that many buyers for shoeboxes.

    Prices have a cliff and a sink hole to fall before people can actually afford a home.

    Rents will keep going up until people smarten up and move back home or with roommates. They will force investors to sell once all the renters are gone or pushing prices down.

    Death loop for a year or two+. 1990 all over again.

  • Khalid khan 1 year ago

    Kim is right they always mislead people I think it’s going to crush in next 10 months

    • Kim 1 year ago

      Khalid this whole boom was way over the top… overdone.
      That’s why I agree with you min. 10 more months to be kind.
      Personally I think the bottom will flatten by the beginning of 2025

  • Marvin 1 year ago

    Canadian Real Estate Price Forecast chart
    Minnesota shown for comparison?

  • John 1 year ago

    Of course buyer sentiment collapsed. Who wants take over someone else’s mistake and pay a rising mortgage on a home thats about to loose half its value. Hard to feel sorry for people who ignored the warnings and payed whatever they could borrow.

  • Guy Demers 1 year ago

    Realtors can only thank themselves for creating this tremendously overpriced market by their misleading the buyer into bidding wars on properties, they are the real scammers in this market. karma.

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