The Canadian Real Estate Association (CREA) has launched a new system to measure home prices and home price growth – the MLS® Home Price Index (MLS® HPI).
The idea of a Home Price Index is not new to Canada. The real estate boards of Fraser Valley and Greater Vancouver have been using an HPI since the mid-1990s. However, the MLS® HPI is the first Home Price Index to use MLS® data to track trends in home prices in markets across Canada.
The problem with the traditional average and median measures is that they can be skewed towards very expensive or inexpensive home sales from one time period to the next. The MLS® HPI will provide a less volatile measure of home prices by taking into consideration overall home prices on the market as well as prices for specific housing categories in a given area.
Indexing will be based on both qualitative data – proximity to shopping, schools, attractions – as well as quantitative data, such as a number of bedrooms and bathrooms, the age of a property, etc. Thus, the new, more accurate, index may better help RERALTORS® figure out what parts of their local market to focus on.
Initially, the MLS® HPI will be published in each of Canada’s major real estate markets (Montreal, Toronto, Calgary, Vancouver and the Fraser Valley) in the beginning of each month to reflect activity that occurred during the previous month. Another 16 major centres should be covered by the end of 2013.
To learn more about MLS® HPI go to http://homepriceindex.ca