A new method for measuring trends in housing prices will soon be available to REALTORS® and the public in five major markets across Canada.
Five of Canada's largest real estate boards – Calgary, Fraser Valley, Montreal, Toronto and Vancouver - together with the Canadian Real Estate Association (CREA) are developing a national housing price index (HPI) which will be ready for launch at the end of January 2012.
An HPI is the best and purest way of gauging price trends in the housing market. It takes housing quality into account, such as housing category, location, number of rooms, living area, etc., in a way that no other method of price tracking does.
An HPI is not new in Canada. Both REBGV and our neighbouring Fraser Valley Real Estate Board have had an HPI in place since 1996, when we hired economists to build a local housing price index for the BC Lower Mainland. The HPI has been widely recognized as providing the most accurate indication of housing price trends in our markets.
An HPI:
Is the best measure for home prices.
Improves measurement accuracy of pure home price change by combining the advantages of Hedonic & Repeat Sales methodologies.
Can track home prices by sub-market (housing sub-category and/or sub-area).
Is based on data from the Multiple Listing Service® (MLS®), which is widely-recognized as the most comprehensive and accurate real estate data in the country.
Expect to hear more about the national HPI in the coming months.
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