The Toronto Real Estate Board and CREA (along with 4 other major Canadian real estate boards) released a new report yesterday called the Home Price Index. It’s kind of like the real estate world’s version of the Consumer Price Index (CPI). It is meant to provide information in a clearer manner, accounting for more specific criteria and taking some of the volatility out of traditional reporting measures that rely heavily on averages and medians.
The new calculation takes into consideration both a home’s quantitative and qualitative attributes including:
- number of rooms above the basement level
- number of bathrooms & half bathrooms
- square footage for main living & basement areas
- lot size
- age of property
- parking
- heating system
- foundation, flooring siding & roofing types
- whether the property has waterfront or panoramic view
- whether the property has been sold previously
- proximity to shopping, schools, hospitals, police stations, chu8rches, sports centres, golf course parks and transportation
This type of reporting will reflect the contribution that various housing features make toward the home price. Using a “benchmark home” (a house whose attributes are typical of homes traded in the area where it is located and having a value that remains constant over time) allows one to see trends in home prices for a specific type of house in a given neighbourhood.
If you’re looking for more details on how it is calculated check out this link. Below you will find the first Home Price Index released yesterday for the GTA.