The MLS® Home Price Index (HPI) was launched on February 6, 2012 as part of a nationwide rollout involving boards in Canada’s largest cities.
By using the MLS® Home Price Index (HPI), CREB® is able to offer more comprehensive and purer data that you can use for property comparisons, understanding future price trends and estimating current market values.
The MLS® HPI is calculated using a sophisticated statistical model that estimates home prices based on their quantitative and qualitative features, including:
Upon valuating these features or attributes, the index and the benchmark price are formulated.
MLS® HPI Benchmark
A ‘benchmark home’ is one that shows a set of attributes typical to the area/sub-market where it is located. Since ‘typical’ homes are different from one area to the next, their descriptions differ between areas. A complete set of benchmark home attributes tracked by the MLS® HPI in each area can be found here. The typical home for each community will remain constant over time, indicating that attributes will not change.
For example, the following table outlines some of the attributes that comprise a typical home for each of the following communities:
Community: Hawkwood; Edgemont; Mount Royal
Property type: 2 storey; 2 storey; 2 storey
Age of property: 16; 16; 50
Finished basement: Yes; Yes; Yes
Living area: 1,164; 1,234; 1,537
Lot size: 4,984; 4,169; 6,463
Above ground bedrooms: 3; 3; 3
Number of covered parking spots: 2; 2; 2
Number of full baths: 2; 2; 3
The MLS® HPI benchmark price is calculated by taking the values determined by the model and applying them to these attributes for the ‘typical’ homes in each area. The value of these attributes is generated based on geographical groupings where the sales that have occurred are similar to each other, i.e. “homogeneous”.
Continuing with the above example, the following data is also available for each community.
Dec 2011 Benchmark
Price; % Change 1 Month; % Change 6 Months; % Change 1 Year; % Change 3 Years
Mount Royal: 2 storey; $1,320,774; 0.69; -5.23; -4.61; -7.05
Hawkwood: 2 storey; $410,286; 1.27; -0.63; 4.61; -0.58
Edgemont: 2 storey; $477,760; -0.58; -2.30; 4.29; 3.03
As noted in the table above, the price of a two-storey home and its attributes varies from each community as do the trends in pricing.
Let us know if you would like to find out the HPI of your community.