You would think that compiling housing data would be a fairly straightforward process, but in Canada it’s been anything but.
You’ve probably heard this one before: “There are three types of lies – lies, damn lies and statistics.” – attributed to Benjamin Disraeli. Or how about this one: “Facts are stubborn things, but statistics are pliable.” – Mark Twain.
You would think that compiling housing data would be a fairly straightforward process, but in Canada it’s been anything but. Through the years, housing stats have been called incomplete, inadequate and part of a plot by organized real estate designed to hide agents’ commissions.
When it comes to real estate statistics, for years consumers and the government have relied on market activity statistics provided by the country’s real estate boards and by the Canadian Real Estate Association (CREA). The most commonly used are the number of sales and the average sales price.
But “average or median prices can change a lot from one month to the next and paint an inaccurate or even unhelpful picture of price values and trends,” says CREA. That’s why in 2009, CREA and five of the country’s largest real estate boards hired Altus Group to develop the MLS Home Price Index.
Altus says the index “analyzes all of the sales data from a board or association’s MLS system, applies a value to the ‘typical’ home for various types of dwellings for each submarket, and tracks the relative change in value over time. Through the timely access to data inputs directly from the real estate boards and associations, real estate transactions across the country are captured on a real-time basis to ensure the index values capture market trends and activity to allow for faster insights for Realtors and their clients.”
The index has grown to include 18 boards across the country. Recently CREA and Altus Group announced an agreement that will expand the index to include all of CREA’s 90 real estate boards and associations. However, the news media still prefers to report average prices, likely because it’s easier to understand than the index.
Another popular statistic is days on market (DOM), which is used to track how long it took an average home to sell via the MLS system. One would assume that the shorter the DOM, the hotter the listing or the local market.
But in Toronto, it became common practice for Realtors to relist homes that didn’t sell right away, so they would pop up as “new” listings on the MLS system. Some homes that had been on the market for weeks showed up several times as new listings.
The Toronto Real Estate Board says that in February 2019, 20 per cent of sold listings had been listed, terminated and then relisted at least once during the original contract period. Since 2003, TREB says 16 per cent of sold listings were relisted.
The board is now providing members with a new statistic, average property days on market(Ave. PDOM), which includes the time a property has been on the market, regardless of the list-terminate-relist cycle.
CREA has been criticized for double-counting some sales in their national numbers when the same sale was reported by two different boards. However, the association says that impacted a very small percentage of transactions.
Statistics provided by the real estate boards are based on sales via the MLS system, and do not include private sales, transfers to family or corporations and sales of new homes and condos where the builders marketed directly to consumers. New home sales have traditionally been provided by local branches of the Canadian Home Builders Association.
A few years ago, when various governments started looking at the issue of foreign buyers and how they could be taxed, there was little data about just how many foreign owners there were in the marketplace. Canada Mortgage and Housing Corp. was tasked with coming up with some hard numbers to support government housing policies.
In 2017, Statistics Canada also upped its game with the introduction of the Canadian Housing Statistics Program, with a mandate to gather information about residential property ownership. In June, it released new data about owners in B.C., Ontario and Nova Scotia in 2018.
For example, it found that 95.5 per cent of residential property owners in Ontario were individuals and residents of Canada. The same goes for 92.7 per cent of owners in B.C. and 92.1 per cent in Nova Scotia.
Statistics Canada says 6.8 per cent of Nova Scotia owners had two or more properties, and that Nova Scotia owners were about one-third more likely to own a second property than those in Ontario and B.C.
There were slightly more female owners than males: 51.9 per cent in B.C., 51.9 per cent in Ontario and 51 per cent in Nova Scotia.
The largest share of owners in B.C. and Nova Scotia was born from 1950 to 1959, while in Ontario, those born from 1960 to 1969 held the largest share. Millennial owners, which Statistics Canada says were born from 1980 to 1999, accounted for one in eight owners in Nova Scotia and one in seven in Ontario and B.C.
As more information is collected about homeownership and real estate, governments should be better able to form housing policies, and home buyers and sellers will become more equipped to negotiate the real estate market.