Toronto realtors get it wrong

Numbers don’t match up in recent Toronto Real Estate Board press release

Everyone is watching Canada’s sputtering housing market these days. Is it the beginning of a crash, or a much-hoped-for soft landing? Every piece of new data is thrust under the microscope. But if you happen to live in Canada’s largest city, you should view the monthly sales figures served up by the Toronto Real Estate Board with an extra-critical eye.

Last week, the board issued a hopeful-sounding press release. After several months of falling sales—down 20 per cent in December—it said the first two weeks of January suggested a mood shift. Sales were up 2.4 per cent to 1,469, compared to the 1,435 reported a year earlier. Prices were up, too—by four per cent, to an average of $459,728 across the Greater Toronto Area, or GTA. “The new year started off on a positive note with residential sales slightly above last year’s levels,” Toronto Real Estate Board president Ann Hannah said in a statement. “I am cautiously optimistic about this result.”

Just one problem: Garth Turner, a former MP and a vocal housing bear, noted on his blog that TREB actually reported a total of 1,506 sales during the first two weeks of January 2012—not 1,435. That’s 71 fewer homes sold this year than last, or a 2.5 per cent decline. Why the discrepancy? TREB spokesperson Mary Gallagher says some home sales end up falling through each month—perhaps because buyers get cold feet, or because their offers were conditional on financing or home inspections. “We’ve chosen in the past couple of years to revise our figures going forward,” Gallagher says, pointing to a tiny footnote that accompanies TREB’s market reports. “We’re not hiding it.”

Even so, it’s not an apples-to-apples comparison. By measuring this year’s initial sales with last year’s finalized deals, TREB’s efforts to track the monthly performance of a key market—both sales and prices—is generally inflated by a percentage point or two, according to a review of its monthly releases. Gains look more impressive and slumps seem less serious. And during the first two weeks of 2013, it suggests a housing market stirring back to life when, in fact, the opposite is probably true.




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Toronto realtors get it wrong

  1. I can’t escape the irony of the Media criticizing someone for manipulating data to support the point of view. The papers. magazines, media in general never give the whole story. They boldly state that condo sales are down 17% signalling a crash, yet, fail to mention that it is down from a ten year high of 27% over the average they year before. So, in fact we were still 10% over the ten year average. How could that be a crash? Ridiculous. If there was no media, the economy would be fine.

    • Couldn’t agree more. The media has been using this ‘Real Estate crash’ crap to sell newspapers and magazines for months now. It’s getting ridiculous. The market is fine, and is supported for many different reasons (interest rates staying low, low unemplyoment rate, immigration/demographics, etc.). Irony indeed.

      • Shrinking GDP, contracting trade surplus, and increasing unemployment are the trends. Yes we have a rising immigration, but with the new mortgage rules, what will be the percentage of immigrants that have 20% down payment on a half million dollar condo? I would estimate the numbers to be low. I completely agree with you on the manipulation of data and feel that the government should somehow regulate press releases. But that would be another infringement on The Charter of Rights and Freedoms, an event that’s all too frequent now a days. so we will just have to filter through the BS that the media puts out try to decide for ourselves what is factual.

    • a crash isn’t based on buying an item 10,15 or 20 years ago. Its based on deceleration of growth. Look at the HPI and you can clearly see prices and volume are coming down. Its not a negative thing. Prices inflate, and the correct. It is the free market place.But Toronto people who think their condo is going to aappreciate in value 10% a year forever are living in a deluded world.

  2. you mean calgary is not the only one !! oh my.

  3. The bad news is Canadian debt level is skyrocketed. Price is simply to high at the moment. It needs to crash.

    • I couldn’t agree more

  4. …”in FACT, the opposite is PROBABLY true.” What a way to conclude a critical article – make it sound factual and no more than a guess at the same time. How about saying objectively “We don’t really know the state of the market” or focusing on the statistics of previous months if you want to support your argument?

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