CMHC's 'irresponsible' forecast for Canadian house prices actually says the same thing as all the others
Canada Mortgage and Housing Corporation president and CEO Evan Siddall addresses the Greater Vancouver Board of Trade, in Vancouver, B.C., Wed. Nov. 30, 2016.industry appears to have been a big misunderstanding over units of measurement.with an “irresponsible” forecast that predicted a much steeper price decline than others.
Watch: Bidding wars in a pandemic? U.S. house prices rising amid economic crisis. Story continues below.CMHC’s forecast was for the average selling price ― a number that fluctuates much more than the house price indexes other forecasts were using as their measure. Many experts say the house price index ― which makes an “apples-to-apples” comparison of house price change over time ― is a better measure of what is happening to the value of individual homes than the average selling price. That latter number can be impacted by a change in the mix of homes that are sold ― such as a drop-off in high end sales, which often happens in economic downturns.
“By our estimates, the CMHC’s forecasts translate into falls in the Teranet index, or like-for-like house prices, of between near-zero and 10 per cent,” Capital Economics senior Canada economist Stephen Brown wrote in a client note.
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