When Statistics Canada reports that house prices continue to rise across Canada, that does not automatically make your home worth more.
Using a statistical measure called the New Housing Price Index, contractors' selling prices are compared month by month and annually to track patterns in prices using the newly-established standard of 1997=100.
For example, based on the May 2003 New Housing Price Index, the following observations were made:
FYI: Federal government housing analysts converted the time base of the indexes from 1992=100 to 1997=100 with the May 2003 New Housing Price Index release. Methodology for aggregating individual price quotes to city, regional and national level indexes are the only things that changed. The new 1997=100 series will be available retroactively from January 1981 so the index movement between January 1981 and April 2003 will be the same for the 1992=100 and 1997=100 series. The 1992=100 based NHPI will not be updated after April 2003.
So where do the statistics leave you?
Neighbourhood and regional pricing differences should be taken into account when selecting a new location. The dollar gap between what you net in a sale and what you'll spend-- that tax-free liberated home equity -- may be essential to preserve your standard of living in the new home. Most experienced real estate professionals offer free comparative market analysis (CMA) for sellers so that they receive a clear picture of current real estate value when establishing list price.
List price and selling price will also be determined by the condition of your property. Twenty- or thirty-year-old plumbing and electrical systems may make your house less attractive to buyers who compare your property with available new homes.
When buying, don't settle for off-the-cuff price quotes. Today's astute buyers should ask their buyer-agent for a CMA of any property they consider buying to be sure listing price reflects CMA numbers and that pride of ownership has not made the seller overly optimistic.
Make your decisions about buying and selling relative to your needs and your market as ever-changing statistics make a poor foundation.
Statistics Canada's May 2003 Building Permits release reported the value of building permits declined in May as construction intentions for single-family homes hit a 17-month low. Builders took out $3.9 billion worth of building permits, down 2.0% from April and a decrease that has continued for four months. But don't panic, Statistics Canada analysts assure Canadians that "despite month-to-month fluctuations this year, Canada's building sector is still performing strongly."