Really Knowing the Housing Market: House Price Indices and You!

In the first part of our 2 part series, “Really Knowing the Housing Market” we discussed what an Automated Valuation Model (AVM) is, types of AVMs, how lenders use these types of AVMs and how to drill down to the micro aspects of real estate values at the level of a property or neighbourhood. In this blog, we will dive deeper into house price indices and how you can know what is happening in the housing market at the macro level.

You likely often see in the news reports about what’s happening in the Canadian real estate market. These report gains and losses in the housing market, expressed as a percentage. This number is usually obtained from known-credible providers of house price indices.

House price indices are indexes that measure the price changes of residential real estate. The numbers produced in the house price indices will vary slightly depending on the data source. This is because different producers of house price indices get their data from different places.

Here are some of the more commonly known house price indices including where there data comes from:

• Teranet National Bank House Price Index – Data comes from property records of public land registries. Where sale price is available, Ontario data is updated regularly and directly from the Province of Ontario's Land Registry Information System (POLARIS) which contains some of the most current and accurate land information available. This product is marketed to and widely used by lenders.

•  MLS Home Price Index – Data comes from the MLS and this index produces home price data on particular homes and neighbourhoods. This is currently marketed as a product for the consumer to use to assess if their property has increased in value.

• Brookfield RPS House Price Index – Brookfield is best known as an appraisal management company, and you can leverage their access to appraisal data to support the development of their house price index

The type of house price index you turn to will depend on your personal needs and how you feel about where the data is coming from and how it is calculated – in terms of the accuracy of the result.

House price indices can help you be more competitive because they can help you to see shifts in the market based on trends and plan accordingly. Using house price indices and AVMs together helps to position you as better informed about everything you need to know about the Canadian housing market.

For more about house price indices and their value please contact Teranet today by calling 1.855.787.8439.

Really Knowing the Ontario Housing Market: Ontario Mortgage Insights (OMI)

Lenders who want to be competitive and keep receivables low must take the time to really know what is happening in the housing markets within which they lend. We have written a series of blogs about really knowing the housing market, but this blog focuses on particular insights that at the moment are only available in Ontario.

Just as automated valuation models and house price indices are excellent tools that can be used in many different areas within a financial institution, Ontario Mortgage Insights is a valuable tool for keeping your finger on the pulse of the Ontario housing market.

Ontario Mortgage Insights reports on housing data and provides lenders with market trend reports by month and geographical location relating to sales, mortgages and home equity.

Access OMI Strategic Monitor Reports for key competitive intelligence:

• Measure your outcomes against those of your competitors through data on mortgages, equity and mortgage switches by institution, area and date.
• Optimize resource allocation and sales effectiveness by tracking your performance in different regions and even neighbourhoods.
• Optimize marketing by identifying strong markets and assessing your market penetration.

It is primarily used by lenders to gain competitive intelligence and optimize resource allocation and marketing accordingly.

Ontario Market Insights has broad use within many different departments within a financial institution.

• Some lenders use OMI in the area of risk management using it to measure activity against that of the competition, analyze lending regions, adjust lending practices according to geographical risk exposure and more…
• Other lenders use OMI to support business development initiatives by accessing key information about competition, understand market shares, and allocate business development resources according to regions that show the most promise.
• Lenders also use OMI to support marketing because they can measure the market penetration of products, identify hot and emerging markets, see where they are gaining and losing market share, allocate marketing resources accordingly and finally track and analyze results.

The above is only possible because of all of the market data included in the OMI.

Market trend data includes: sales of properties and values of transfers, number of home sales, total value of sales, mortgages registered, value of mortgages, home equity in properties, turnover rate in a particular area and more…

Strategic monitoring data includes: estimates of market penetration, registered mortgages, equity on properties, mortgage switches and more…

Ontario Mortgage Insights goes a long way to keep you in the loop of what’s happening in the Ontario housing market and specifically insights that lead to you being more competitive.

Don’t miss any opportunity to become more competitive. Contact Purview For Lenders today to find out more about OMI and other tools to make you more efficient: 1.855.787.8439.