As a follow-up to my posting of February 22nd "Is It Good News, Bad News, or Just News That Sells? I offer the following update on the "Special Report" in the March 2nd edition of Maclean's magazine pertaining to Canadian house prices.
In the subject article authored by Duncan Hood, one has to question the credibility of the story. Hood makes numerous references to the Teranet-National Bank House Price index which tracks home prices in six centres across Canada including Toronto see http://www.homepriceindex.ca/. Hood states in his article "When the Teranet market started up in December, it immediately predicted a shocking drop of 20 per cent, followed by an excruciatingly slow recovery that might not see prices return to last year's high for seven years, or longer."
For those not familiar with Teranet, it is the company that provides exclusive access to Ontario's electronic land registry system. Real estate Board's across the province are subscriber's to Teranet's data which includes sales and other information of the various municipalities across Ontario. In regards to the Maclean's article, Teranet made the following statement: "Teranet would like to take this opportunity to correct some erroneous information and misleading statements that have been made in a Maclean's article and on a BNN news segment, regarding Teranet's role in the Teranet-National Bank House Price Index (HPI)."
With reference to the above quote by Maclean's, Teranet had this to say: "To clarify, there is no Teranet market. We do not operate a housing futures market. Also, Teranet and the HPI, make no such prediction whatsoever." Further, "We do not make any predictions on future house prices nor do we make any predictions on when house prices will return to last year's numbers.
I believe that most journalists do a pretty good job of verifying their information which lends to the credibility of their reporting even if it is sometimes overly negative. The Maclean's story on the other hand appears to be based on a nunber of untrue allegations on the part of it's author Duncan Hood. The accompanying graph entitled The future of house prices in Canada was taken from the Maclean's article to which Teranet makes the following statement: One needs to understand that the Market Forecast of that graph is again the prediction of various economists and investors, not what Teranet has actually measured. The HPI is not a predictive system; it only reports on what has actually happened in the six markets it covers."
I maintain that no one has the ability to accurately predict where house prices are going to go. Why? Because prices are ultimately set by what a willing buyer is prepared to pay and that will vary dramatically from one buyer to the next, market to the next, from one neighbourhood to the next and from one house to the next. Clearly, Maclean's is the last place to be looking for any kind of accuracy with respect to what is actually taking place in today's real estate market.
In the subject article authored by Duncan Hood, one has to question the credibility of the story. Hood makes numerous references to the Teranet-National Bank House Price index which tracks home prices in six centres across Canada including Toronto see http://www.homepriceindex.ca/. Hood states in his article "When the Teranet market started up in December, it immediately predicted a shocking drop of 20 per cent, followed by an excruciatingly slow recovery that might not see prices return to last year's high for seven years, or longer."
For those not familiar with Teranet, it is the company that provides exclusive access to Ontario's electronic land registry system. Real estate Board's across the province are subscriber's to Teranet's data which includes sales and other information of the various municipalities across Ontario. In regards to the Maclean's article, Teranet made the following statement: "Teranet would like to take this opportunity to correct some erroneous information and misleading statements that have been made in a Maclean's article and on a BNN news segment, regarding Teranet's role in the Teranet-National Bank House Price Index (HPI)."
With reference to the above quote by Maclean's, Teranet had this to say: "To clarify, there is no Teranet market. We do not operate a housing futures market. Also, Teranet and the HPI, make no such prediction whatsoever." Further, "We do not make any predictions on future house prices nor do we make any predictions on when house prices will return to last year's numbers.
I believe that most journalists do a pretty good job of verifying their information which lends to the credibility of their reporting even if it is sometimes overly negative. The Maclean's story on the other hand appears to be based on a nunber of untrue allegations on the part of it's author Duncan Hood. The accompanying graph entitled The future of house prices in Canada was taken from the Maclean's article to which Teranet makes the following statement: One needs to understand that the Market Forecast of that graph is again the prediction of various economists and investors, not what Teranet has actually measured. The HPI is not a predictive system; it only reports on what has actually happened in the six markets it covers."
I maintain that no one has the ability to accurately predict where house prices are going to go. Why? Because prices are ultimately set by what a willing buyer is prepared to pay and that will vary dramatically from one buyer to the next, market to the next, from one neighbourhood to the next and from one house to the next. Clearly, Maclean's is the last place to be looking for any kind of accuracy with respect to what is actually taking place in today's real estate market.
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