The sky’s not falling in the housing market

When I wrote last week about the sea of housing market statistics that homebuyers get bombarded with, I forgot to mention all the one-off reports that emanate from the major brokerages and financial institutions.

 

I have a hard enough time keeping up with the information overload myself, let alone the ultimate spin put on the numbers by the media, who tend to focus on the negative more than the positive, so I have some empathy with homebuyers who also need to make sense of it all.

 

A good case in point would be the Scotiabank Global Real Estate Market Trends report which came out last week.

 

Asked to comment on the report by Global TV, I did what I always do before opening my mouth — I read the report.

 

The report’s author, respected and experienced economist Adrienne Warren, revealed that global housing markets improved in the first quarter of this year with Australia and Canada “leading the pack.”


The report went on to note that housing markets “cooled off” in the second quarter of the year, which to me is natural after markets peak.


Of course the numbers need to be seen in that perspective, but news media reports rarely delve that deeply while headlines can be downright misleading.


For example, the report noted that “average home prices in the second quarter of this year were up by just 6.8 per cent compared with 16.6 per cent year/year in the first quarter.”


When I read that, I thought hey, that’s great! In my view, crazy price increases encourage investors but discourage real buyers while a solid 6.8 per cent return keeps the focus on housing as shelter rather than an investment.