2010 & 2011 BC Housing Sales Forecast Revisions for BCREA, CREA, CMHC

Forecasting British Columbia’s real estate market sales has always been a difficult proposition.

The British Columbia Real Estate Association (BCREA), Canada Mortgage and Housing Corporation (CMHC) and the Canadian Real Estate Association (CREA) are three of the main sources for periodical Canadian housing forecasts. Other sources include Canada’s major Banks, large national real estate companies and other independent bodies.

There is no crystal ball to rely on. Economists use a dose of trend analysis and fine tune that with probability and statistical information to come up with what amounts to a best guess.

Forecasting on the upside is a much easier proposition, as no one will blame you if things turn out better than expected. Downside forecasting is however a totally different game.

Forecasting on the downside is much riskier because an association or agency does not want to create the market, just report on it. Market sentiment must be taken into consideration, therefore a common trait of downside forecasting is, the revision.

Revisions to forecasts are commonly used to reflect changing market conditions and new information as it becomes available.

This year the British Columbia real estate market has had a number of issues to contend with that further complicated the process. Canadian mortgage rules were changed on April 19, 2010, a new 12% HST combined tax was introduced on July 1, 2010 and the Bank of Canada raised interest rates on June 1 and July 20 for the first time since July 10, 2007.

So you can see that forecasting in this environment is akin to running through a minefield while trying to hit a moving target.

Since the beginning of the year, MLS sales forecasts for 2010 and 2011 in British Columbia have been revised downward on several occasions by the BCREA, CMHC and CREA.

Here are the details from the beginning of 2010 to the most recent forecasts available as of our publishing date: