How fast are house prices increasing in Victoria? It really depends on what measure you use.
For years I’ve been saying that month to month averages are useless and month to month medians are almost useless. They vary wildly and can jump almost 50,000 from month to month. Looking at those numbers is a surefire way to lose the forest for the trees.
If we want to measure price changes, we are essentially looking at 3 different options:
- Median and average prices – The most direct measure of prices since they are the least processed, but subject to quite a bit of variability. I prefer the median because it is less influenced by outlying high end sales. If we want to make sense of these, we need to apply a rolling average to smooth them out. 3 months seems to be the minimum to take out the worst of the noise. 6 months is a good mid point, and 12 months is great for factoring out any seasonality at the price of flattening short term trends.
- Teranet House Price Index – The Teranet house price index is the oldest repeat-sale index that we have in Canada. It uses sales pairs (the same house selling twice) to gauge how prices are changing over time (methodology). The HPI is published about 2 weeks after the end of each month.
- MLS House Price Index – This index is created by the Canadian Real Estate Association and is another repeat-sale index. Although it’s created by the real estate industry, the advantage is it is much more detailed and can be broken down by housing type and sub-region (although there are issues with that).
Note that median price data for Greater Victoria SFHs starts in January 1988. The Teranet HPI starts in January 1996 (and is published on a 2 week delay hence no data yet for April), and the MLS HPI starts in January 2005.
Without further ado, here’s the tool to play around with. Mouse over the chart to change the start and end dates. It’s also been added to the Tools page.
Note: if the chart isn’t showing up above, press refresh in your browser.