This article exemplifies two or three of my pet peeves about newspaper writers, headline writers and print/post editors when the add stories on Real Estate and quote “experts” from the Stock/ Bond/ Financial Derivative/ Wealth-Mgmnt fee-gathering / wholesale REIT-flogging businesses … who have competing “dogs in the hunt” for consumer investment $$$
Written by Grainne Burns in Canadian Real Estate Wealth Online Magazine
Uncle Bob Ede says:
Old data. Alarmist tone. No insight – just out-of-date housing info manufactured into a sensationalist “news story”
#1, the AVERAGE Cdn home price AND the AVERAGE Cdn household income does not exist, it’s a calculation, a hypothetical, yes a benchmark – but that benchmark must be looked at as an annual (perhaps qtrly) trend, not monthly news
#2 The rise in mortgage rates in Sept 2013 (due to a complete mis-interpretation of US Fed Chm Bernacke’s August Fed Minutes/comments, the subsequent over-reaction in USA bond market and the automatic, opportunity-reaping rate-hikes of 2-5yr term, mortgage lenders) coupled with recovering prices in Vancouver, Calgary, Edmonton and highest-ever for the month prices in Toronto, Hamilton (I think in Quebec City and other cities too) have of course made the mathematical ratios jump. (I leave the seasonally-adjusted “integrity” of the numbers for another time)
BUT these rates have now almost completely return to their former all-time record low in all term categories
Therefore the news ain’t news today – and that’s when buyers buy or contemplate buying -today.
Presenting 180%-off-accurate housing affordability info, that has been already-proved-wrong in the time subsequent to the collection/ analysis/ publication of the underlying data, as hot news, is mis-representation of a kind any Registered Real Estate Person is prohibited from making.