Yesterday, REMAX claimed that the Canadian Housing Market had a 11% yearly return on your investment over the last 25 years. The true return was around 3-5% if you use compund interest. It was blatant Spin to encourage people to purchase RE, which was proudly published by our mainstream media. Another thing they failed to mention was the Stock market would have yielded a far better return over the same period. I think most media sources have changed this error in their reports, only after the public brought it to their attention.
"Nationally, the compounded annual rate of return is 5.3 per cent, the real
estate firm said, correcting an earlier release that said average home values appreciated 11 per cent annually over the 25-year period." Globe and Mail
A lot of Blogs, yesterday had postings on this where you can get the anti-spin.
- Math-challenged. Economics-challenged. Reality-challenged
- Realtor Math Invades Canada
- Home values see annual double-digit rises: Re/Max
Remember this every time you see an article in the Paper that quotes the RE Industry. They have a vested interest in you buying and selling your house. It is nothing more than an advertisement.
3 comments:
Correction, TSX was 7.8%.
Greetings from Atlantic Canada and thanks for the link to my Doom post this morning! I'm happy the Globe & Mail printed an actual correction, and I'll add that to the comments under the post. Do I understand RE/MAX clarified too? Thank heaven for small mercies ...
No Problem, It's a good site you and twist have there.
Small world, I thought you were American.
I think REMAX did make the correction.
Post a Comment