Wednesday, 15 May 2013

Did Rents REALLY Go Up 10% Over The Past Two Years?

Urbanation recently reported that rents went up by 10% over the past two years. I don't know their methodology, but I suggest that everyone should start questioning their statistics since they cannot even get the basics right!

For example, Urbanation reported: "A total of 3,919 condominium apartments were leased in Q1-2013 on the crea system, up by 31% from a year ago." 

I call bulsh*t on that!

Source: TREB

A 31% increase in leased apartments in a year? Huh? Did they forget to put their glasses on?

In reality, there was only a 13% increase in leased apartments on a year-to-year term. There is a huge difference between 13% and 31%! How on earth did they come up with that number? Typo?

So now back to the 10% increase in rents over the past two years. It looks like they calculate rent increase based on square footage, but I am not 100% positive on that. Regardless, I don't believe that rents went up 10% in the past two years and I have a proof.

I pulled in the rental reports from TREB, for Q1 2012, and Q1 2013, and did some basic math. Here's what I've got:

Based on TREB data, condo apartment rents went up by over 7%, not 10%! The average rental price growth between 2011 and 2013 was calculated by dividing total volume by total leased apartments.

Unless Urbanation publishes their methodology explaining how they calculate their numbers, I will call Urbanation - Urbamanipulation!

See also: Toronto home sales are lower then being reported


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