Statisticians have a saying which illustrates how averages can sometimes obscure what’s really going on: “head in the oven, feet in the fridge, but on average, the temperature is OK.” This is a pretty good description of the real estate prices in Canada today.
The National Composite House Prince Index published by Teranet and National Bank is the most accurate (some would say the only accurate) measure of Canadian house prices. The Index uses a rigorous methodology to track house prices in 11 major cities across Canada.
This week Teranet-National Bank put out a their Iatest report, pointing out that “in January the <Canadian> composite index was up 5.9% from a year earlier”.
This is true but misleading because the housing market truly has its “head in the oven, feet in the fridge.” In Vancouver, Hamilton and Toronto house prices were up significantly (12.5%, 10.3% and 8.6% respectively, while they were nearly flat in many major cities and fell in Calgary, Ottawa and Edmonton (-2.6%, -2.0% and -1.9%).
These year-on-year numbers may also obscure more recent developments in the market. Toronto, for example, was up 8.6% year-on-year but fell slightly over the month of January (-0.2%).
It pays to look beyond the headlines when making decisions about real estate. You can access the Teranet-National Bank index for free at Teranet – National Bank National Composite House Price Index