OTTAWA, Feb. 6, 2012 /CNW/ - The MLS® Home Price Index rebounded in
January following monthly declines in each of the two previous months,
according to statistics released today by The Canadian Real Estate
The MLS® HPI is designed to be a reliable, consistent, detailed, and
timely way of gauging home price trends. It is calculated each month
and covers five major housing markets: Greater Vancouver, Fraser
Valley, Calgary, Greater Toronto, and Greater Montreal, with additional
markets to come. It is generated and published under agreements between
The Canadian Real Estate Association, the five boards listed above, and
The aggregate composite MLS® Home Price Index rose 0.27% on a month-over-month basis in January 2012
after having declined by a 0.20% dip in December and by 0.07% in
The rebound was led by increases in Montreal (0.68%), Toronto (0.28%)
and Vancouver (0.06%), which more than offset monthly declines in the
Fraser Valley (-0.14%) and Calgary (-0.12%).
Prices were up on a month-over-month basis for 1- and 2-storey single
family homes, rising 0.47% and 0.53% respectively.
This increase more than offset slightly lower prices for townhouse/row
units (-0.41%), and apartment units (-0.20%).
The index remains up from year-ago levels in all five of the markets
tracked, led by Toronto (7.6%).
It also remains above year-ago levels in all housing categories tracked,
led by 2-storey single family homes (6.7%).
The MLS® Home Price Index rose 0.27 per cent in January 2012 compared to
the previous month. Gains in Montreal, Toronto and Vancouver more than
offset slightly softer readings in the Fraser Valley and Calgary.
The index remains 5.2 per cent above levels for January 2011. Led by
Toronto (7.6%), all five of the markets tracked posted year-over-year
increases. The index was also up from year-ago levels in all housing
categories, led by two-storey single family homes (6.7%).
"While home prices remain up compared to one year ago, price growth from
one month to the next has been slowing, causing year-over-year gains to
shrink, and prices are generally expected to continue to stabilize this
year," said Gary Morse, CREA President. "That said, many parts of the
country could continue to see gains, while others may see home prices
soften. All real estate is local, so talk to your local REALTOR® to
better understand how price trends in your neighbourhood are shaping
In recent months, the index for single family homes has generally held
steady while trending lower for townhouse and apartment units. This
trend continued to play out in January 2012, with monthly declines
reported for townhouse/row units (-0.41%) and apartment units (0.20%).
By contrast, 1-storey single family homes posted a 0.47 per cent gain,
while 2-storey single family home values gained 0.53 per cent.
The MLS® HPI - A better way to gauge home prices
"The introduction of the MLS® HPI will provide clients and REALTORS® a
more timely and accurate gauge of home values in a number of major
markets across Canada," said Morse.
In each of the five markets included in the index, MLS® HPI data are
available for: single family homes, which are further split into
1-storey, and 2-storey single family homes; townhouse/row units; and
apartment units. Data for these housing types are also available along
detailed neighbourhood lines (areas and sub-areas) for each market
tracked by the index.
Indices for each of these housing types are used to calculate a
Composite (i.e. overall) MLS® HPI in each market tracked by the index,
which reflects the general price trend in each market. MLS® HPI data
for each market are also used to calculate Aggregate MLS® HPI data for
each housing type tracked by the index. The data are also used to
calculate an Aggregate Composite MLS® HPI index, which gauges general
(overall) price trends for the collection of Metropolitan markets
tracked by the index.
The MLS® HPI is calculated using a hybrid approach that merges
Repeat-Sales and Hedonic Price methodologies, and reflects
contributions made by various quantitative and qualitative housing
features toward the home price, including but not limited to:
Number of rooms above the basement level
Number of bathrooms & half-bathrooms
Square footage for main living & basement areas
Whether it has a fireplace and/or finished basement
The age of the property
How the home is heated
Foundation, flooring, siding & roofing types
Whether the property has waterfront or panoramic view
Whether the property has been sold previously (newly constructed and
previously unsold, or repeat sale)
Proximity to shopping, schools, hospitals, police stations, churches,
sports centres, golf courses, parks, and transportation (including the
train station, railways, and airports)
"Changes in average and median home prices are open to
misinterpretation, since they can swing dramatically based changes in
the mix of home sales," said Gregory Klump, CREA's Chief Economist.
"The MLS® HPI overcomes this shortcoming, and does a better job of
tracking Canadian home price trends than any other measure."
"The Repeat-Sales approach for tracking home price trends has other
limitations," said Klump. "Because it tracks only homes that have been
sold at least twice, useful information is omitted, and it may be
incapable of reliably tracking home prices for different neighbourhoods
within a housing market. The Repeat-Sales approach may also take longer
to produce home price indices due to data collection and availability
considerations. But most importantly, that approach assumes that every
home being tracked remains constant over time, which is unrealistic
since Canadians spend a lot of money on home renovation each year."
"Corresponding MLS® HPI Benchmark prices meet longstanding needs for a
way of gauging home price changes while keeping quality constant. They
are also the most current and make it possible to more quickly identify
turning points for home price trends," he added.
About the MLS® Home Price Index
The MLS® HPI is generated and published under agreements between The
Canadian Real Estate Association, Greater Vancouver Real Estate Board,
Fraser Valley Real Estate Board, Calgary Real Estate Board, Toronto
Real Estate Board, Greater Montreal Real Estate Board, and Altus Group.
The MLS® HPI model was developed by a design team at Altus Group that
includes Professor François Des Rosiers, the 2011 recipient of the
International Real Estate Society Achievement Award. He has been
teaching Urban and Real Estate Management since 1976 within the Faculty
of Business Administration of Laval University in Quebec City, Canada.
Altus Group leads the global real estate industry in delivering data and
key information about an organization's assets, generating a wealth of
knowledge and insight. With a staff of over 1,700, Altus has a network
of over 60 offices in 14 countries worldwide, including Canada, UK,
Australia, Asia and the United States. Altus operates five interrelated
Business units, bringing years of expertise together into one
comprehensive platform: Research, Valuation and Advisory; Cost Consulting and Project
Management; Realty Tax Consulting, Geomatics and ARGUS Software. Altus' clients include banks, financial institutions, governments,
pension funds, asset and fund managers, developers and landlords and
companies engaged in the oil and gas industry.
For additional information, including interactive tables, methodology
and partner contact information go to: www.homepriceindex.ca
MLS® is a co-operative marketing system used only by Canada's real
estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada's largest
single-industry trade associations, representing more than 100,000
REALTORS® working through more than 100 real estate Boards and
SOURCE Canadian Real Estate Association
For further information:
Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460