Eug
Senior Member
That graph is actually pretty reassuring, and more so than I might have expected.
P.S. South Africa's price rise since 2000 is downright scary.
P.S. South Africa's price rise since 2000 is downright scary.
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Baby, we got a bubble!?
- Thread starter simuls
- Start date
X2 Buyer
Active Member
Maybe this question is 'dumb', I just adjusted the date from 1987 Q1 to 2009 Q3. Canada appears to be at the bottom.
Does this implicate we do not have much price increase for '80s or probably '90s but more in '00 and forward? Would this be explained by the immigrants trends? Anyone can have the answer?
interested
Senior Member
I agree totally. The graph can be used to be very reassuring over different time frames. Starting in 2008 when everyone else was crashing is an unfair comparison. We did not have the spectacular rises in the 10 years preceeding compared to alot of countries. that would be doing the same thing as preselecting out the crazy period from 1985 to 1989 in Toronto when the market tripled and saying we will compare 1989 to 1991. Of course it will show a much lower bottoming out since it rose so insanely prior to that and you start at a high point. We did not rise that much compared to the US/UK/Spain and hence less to fall. Take say a 10 year horizon and you will see that we are not any higher and in fact lower than these countries so why would we drop off like them? We should correct down but proportionately, all other things being equal. We went up 60%, they 200% say: they drop 30%, we should drop 10%. Certainly not the same 30%. they had a bubble that everyone now appreciates, much like our 1985 to 1989. We have not had doubling/tripling occuring within 3-4 years but rather 30% growth rates.
Liars, Damn Liars, and Statisticians playing with numbers to prove a preconceived point.
daveto
Active Member
CN Tower, I agree with your conclusions. However, something is wrong with the Economist's data. For example, their data is showing that Canadian prices from 1980 to 2008 have declined 20%+ vs avg income.(?!) Similarly, it shows prices in real terms virtually unchanged 1987 to 2009.
A shame, because I've been looking for a data source like what they have there. Easy to read, good reputation, etc. I'll be looking that the economist's reports with a much more critical eye from now on.
Gentlemen, as I posted earlier in this thread (see above) the data in the graph for Canada is WRONG. I don't know how or why but it is most certainly wrong.
Canada's prices have not dropped 20% vs avg income in the last 30 years! Avg incomes have been flat over the past 30 years (adjusted for inflation), and housing prices have most certainly not declined 20% as we all know.
And if Canada's data is wrong, then the rest of the country's data is highly suspect
Doesn't anybody read my posts??? (...actually, don't answer that!)
Eug
Senior Member
Home price index:
In real terms:
Vs. income:
In real terms:
Vs. income:
interested
Senior Member
Dave,
I think EUG posted the graphs to try and show you were you might be drawing perhaps a wrong conclusion. You have to remember that 1989 was a very high peak. This resulted in price increases from 1980 to 1989. From 1989, prices at least in Toronto declined to 1996 and then slowly recovered to get back to 1989 prices around 2002 or 2003 (not even allowing for inflation). From 2000 to 2009 prices went up but in fact if one adjusts for inflation over the long term, I believe the graphs are correct. You have to appreciate that a 14 year period from 1989 to 2003 with no growth at all offsets alot of early growth/late growth and in inflation adjusted terms may in fact have truly declined over the long term.
I read your posts. and I find alot of them well thought out and insightful.
Take some reassurance in that. I am sure alot of UT forum members feel the same.
daveto
Active Member
Interested, don't worry I'm not blowing a gasket. I do 10+hrs of yoga a week, I'm actually pretty laid back.
I repeat that the data used for the Economist's charts is wrong. I don't know how to embed the graphs.
If you choose the "prices in real terms" option at the top, and choose 1987-2009, it shows flat prices for Canada over that period. Literally 0% increases (in real terms). Surely we can all agree that is wrong??
Page 2 of the following shows a 30% increase 1987 to 2006 (not including the increase 2006-2009)
http://www.desjardins.com/en/a_prop...actualites/point_vue_economique/pve60622.pdft
And if you choose "price against avg income" at the top, and choose 1975-2008 it shows a 35% drop.
If Eug or someone else can embed the graphs that would be appreciated.
I repeat that the data used for the Economist's charts is wrong. I don't know how to embed the graphs.
If you choose the "prices in real terms" option at the top, and choose 1987-2009, it shows flat prices for Canada over that period. Literally 0% increases (in real terms). Surely we can all agree that is wrong??
Page 2 of the following shows a 30% increase 1987 to 2006 (not including the increase 2006-2009)
http://www.desjardins.com/en/a_prop...actualites/point_vue_economique/pve60622.pdft
And if you choose "price against avg income" at the top, and choose 1975-2008 it shows a 35% drop.
If Eug or someone else can embed the graphs that would be appreciated.
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interested
Senior Member
glad to hear that you aren't blowing a gasket. wouldn't know whether to send you a doctor or a mechanic.
Not to belabour the point but 1989 was a peak year so over 20 years inflation adjusted prices probably have dropped but recall 1985 to 1989 prices in Toronto increased three fold and therefore 1989/1990 as a start point was at the top of the cliff and results in what appears to be a perverse result(though not an incorrect one in my view).
Might I suggest you write to the Economist suggesting they may have made an error and ask for clarification on the data. If they agree there is an error, I would be most interested as it is eye opening data when the data is looked upon in this fashion.
daveto
Active Member
glad to hear that you aren't blowing a gasket. wouldn't know whether to send you a doctor or a mechanic.
Not to belabour the point but 1989 was a peak year so over 20 years inflation adjusted prices probably have dropped but recall 1985 to 1989 prices in Toronto increased three fold and therefore 1989/1990 as a start point was at the top of the cliff and results in what appears to be a perverse result(though not an incorrect one in my view).
Might I suggest you write to the Economist suggesting they may have made an error and ask for clarification on the data. If they agree there is an error, I would be most interested as it is eye opening data when the data is looked upon in this fashion.
The gibberish in the quote was from my attempt to embed the graphs. Also, the Economist's data is for Canada and not just Toronto.
interested
Senior Member
I know it is for Canada, I was just using Toronto as an example as I was more aware of the numbers. I appreciate across Canada the numbers would differ.
I appreciated the gibberish was the quote. I am a bit of an idiot when it comes to using computers and it takes alot from me just to get the quote to show up, let alone edit it. so this wasn't you but rather my ineptitude that I was referencing
Eug
Senior Member
This is for Toronto:
You'll note that prices in real terms were the highest 20 years ago, and higher than they are now (albeit not by much).
You'll note that prices in real terms were the highest 20 years ago, and higher than they are now (albeit not by much).
interested
Senior Member
This is for Toronto:
You'll note that prices in real terms were the highest 20 years ago, and higher than they are now (albeit not by much).
Thanks EUG,
Proves my toronto hypothesis though dave is correct in pointing out that this is not Canada wide. that said, I believe the graphs for Canada in the Economist are correct(as you so kindly posted before).
X2 Buyer
Active Member
That's right so using the 1989/1990 as the start point - see Eug's above graph the trend of Toronto (if reflected about the same for Canada) then the downward trend and upward back again.
daveto
Active Member
You guys are joking surely?? You're just messing with me?
First, the Economist's graphs are for Canada, not Toronto. Canada did not have the same bubble in the late 1980s that Toronto did (although our bubble will skew the avg).
Second, the figures I quoted were from 1987 and not 1989. This avoids a major portion of the 1980's Toronto bubble.
Third, the Economist's figures show that Canada house prices compared to avg incomes have FALLEN 35% over the past 35 years. Whereas we all know that at $320k (approx), the avg Canadian home is know at a ratio of more than 5 times avg household income and is the highest in history (and certainly not 35% lower than 35 years ago).
First, the Economist's graphs are for Canada, not Toronto. Canada did not have the same bubble in the late 1980s that Toronto did (although our bubble will skew the avg).
Second, the figures I quoted were from 1987 and not 1989. This avoids a major portion of the 1980's Toronto bubble.
Third, the Economist's figures show that Canada house prices compared to avg incomes have FALLEN 35% over the past 35 years. Whereas we all know that at $320k (approx), the avg Canadian home is know at a ratio of more than 5 times avg household income and is the highest in history (and certainly not 35% lower than 35 years ago).
interested
Senior Member
I am not really joking with you. I believe the economist may well be correct at least on some of the graphs. I am not sure of the figures for all of Canada but given that Toronto is the largest market, it will skew figures certainly though if the rest of the country was vastly different, then one cannot extrapolate from the TO market.
I have to ponder your 3rd argument. I have seen it expressed before. Perhaps you could provide me the reference. I understand what you are saying. I can't refute that but perhaps another poster sees a flaw with it?
EUG any thoughts since you are helping provide data. On the surface Dave's 3rd argument would appear to stand up