Is Emili smart enough to know your house price?

Now that the Canadian housing bubble appears to be running out of steam we’re starting to hear concerns that automated appraisals have helped push prices up higher than they ought to be.

This article in the globe and mail was linked in fridays free-for-all post, but is worth a closer look.

Automated appraisals save time and money but have such a big margin of error that they are practically worthless.

Now people involved in lending are starting to worry about the fall out of relying too much on an automated system:

Introduced in 1996 as a way for the CMHC, banks and other lenders to quickly and inexpensively determine how much money can be lent against a residential property, the database known as Emili is relied upon too heavily by lenders, the documents suggest.

Emili is an automated system that uses figures such as recent sales of nearby homes to gauge values, without sending an actual appraiser to the address. However, the potential margin of error in calculations may pose significant problems. For home buyers, or homeowners with home-equity lines of credit, an inaccurate valuation by the database could allow them to overpay or borrow much too heavily for the home, industry members argue.

For banks, it could mean the collateral they have against the mortgage is not worth as much as believed.

Ooops!  But as a comforting side effect, it appears that appraisals that came in too high in a hot market did enable the CMHC to collect higher fees.  Read the full article here.

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@Ralph Cramdown: Pretty close. Very surprised.

Ogga Booga

@rp1: Maybe Chinese businesses pay more in advertising.


#75 @kansai92: I noticed the Chinese Vancouver Sun doesn’t ask you to pay. Is that a metaphor for our times or what?


With Globe and Fail following the footsteps of Hongcouver Sun, now is a great time to start up a free ad-based independent news website.


What kind of sales volume is typical for october?

More Data Please

@Anonymous: re: “US bonds backed by rental income” I think the sentiment of the article is all wrong. Nobody is getting rich without staking real money in return for the opportunity. This is great news! First of all, unlike mortgage backed securities, the property itself is fully capitalized by a reliable counterparty who can actually understand and afford the investment. Second, this will build a stable and reliable stock of rental inventory. Third, it is better than REIT common stock for investors, because the instrument has a guaranteed maturity value and is non-subordinate debt (which subjects the issuer to direct creditor demands on assets rather than shares). Fourth, and most important to readers of this forum, it shows how cheap property becomes at the bottom of the cycle! The announcement of this product confirms that it is now so… Read more »


#2 made some comment, like…
”Incidentally, Freakonomics has a new podcast clip on the topic of demand side bounties with real world examples of unintended consquences going back hundreds of years”.

That phrase pisses me off. Unintended consequences … like it’s a little oopsie … unplanned, unforeseen, an unintended consequence. Never mind it’s ‘going back hundreds of years’.

ffs …

Oh Oh

Anyone heard the latest progress on the 70 OV owners suing the COV for crappy condos?


@Don Lapre:

This is Tien Sher who owns the propertys “Quattro” in Surrey. They originally planned 4 phases. They currently have completed Phase 3 and can’t sell the units.

Burbs Boy

snort… HA HA HA.. Paris… Whalley… ok I haven’t laughed that hard in a while… 🙂


@Don Lapre:

“Sethi said this project follows in the footsteps of similar ones in New York, Tokyo and Paris.”

Ah, yes. New York, Tokyo, Paris and Whalley. Makes sense.

Bo Xilai

@More Data Please:

“Audio of COC’s bitching (preview)!”

It’s amazing… It’s like the woman being interviewed pretends the mortgage company kidnapped her and her husband, pointed a gun to their head and forced them to buy a “ridiculously overpriced” house. Fecking incredible!

Waiting to exhale

Now for some bear food: Ran into a amicable co-worker last week and I was surprised to see him because he was suppose to transfer out of Vancouver and begin a new life in Ontario. So I asked what happened and he told me he couldn’t sell his condo and he could not take the financial loss if he tried to sell at current prices. He estimates he would lose between $30,000 to $40,000. Then I asked why not try renting it out and he told me he would actually be short $300 to $400 at current rental prices (he had a rental management company assess his situation). Now for the details: He bought into a two bedroom low level condo during the pre-sale period for about $290,000 out in Langley. Apparently the last two weeks the builder has been… Read more »


@jesse: A dead cat may not land on it’s feet 😉


@Boombust: “a mere dead cat bounce brought on by falling knife catchers”

Asking for a friend, is it possible to catch a falling dead cat?


Sales are down 25% from 2011 for the first 11 sales days, that’s not bad! For us at least.



Not sure how many $5,000,000+ apartments have sold so far this year in Vancouver, but this seems like a LOT of supply……………..and pricing that is out of this world……………

I’m pretty sure that building wins the prize for the most ludicrous price/rent ratio in Vancouver:

$9,000 a month to rent a $5.2 million apartment, IF they get that. That’s price/rent of 577.

These places could see a 70% crash and they would still be overpriced based on fundamentals.


re micro suites in Survey,

these kind apartments usually are built in downtown where land is expensive. why built in Survey? i don’t get it.


“Current October sales rates are way above September’s. I don’t think that’s too much of a surprise, as unpopular as that might be on this blog. It is, however, stronger than I expected.”

…or, a mere dead cat bounce brought on by falling knife catchers?



“Who the f#!k would even consider this?”


Helmut, the Two Michaels, Tsur, Ozzy and GLOBAL.


…and, throw in Harper and Flaherty for good measure.

Don Lapre

Here’s an article about some beautiful condos in Whalley that was also the subject of a story on Global News tonight.. billed as a great way for those with lower incomes to get on the property ladder…

“If you can afford the $6,000 down payment, and you make a salary of $17 per hour, we have a home for you.”

Who the f#!k would even consider this?

More Data Please

@rp1: Audio of COC’s bitching (preview)! Seek to 14:30 (14 minutes 30 seconds) to hear a Caucasian saying: …”we hope mortgage companies take responsibility”… …”not the ridiculous price that we paid for it”… …”we’re hoping that it forces mortgage companies to”… …”we were paying all our bills, … but since then”… …”not fair”… …”it’s not [our] fault”… This audio is a preview of the future Global clip par excellance, but with an Irish accent. Here is one last quote that I found rich: …”we can’t afford our home anymore”… Sadly, the interviewer neglected to ask the million dollar follow-up question: “Is it possible that you really couldn’t afford your home when you originally bought it?” Another good hypothetical question would have been: “Were you actually advised by a real person to buy the house in the first place? And,… Read more »


boring cookie cutter apartments, and whats with “east (quiet side)” umm isn’t this building beside a bridge?


More amazing than Maynards, is Three Harbour Green at 277 Thurlow Street; completed in the last couple months, a total of 8 MLS listings so far; five by the developer, which means they have at least twice that number unsold from a total of 81 apartments and townhouses in that building: MLS # Apt # Beds Baths SQ FT Strata fee Price V971532 # 1101 2 3 2,513 $956 $5,080,000 V973275 # 1102 2 3 2,600 $990 $5,240,000 V972917 # 1901 2 3 2,500 $990 $5,280,000 V951976 # 1202 2 3 2,630 $1,000 $5,800,000 V972419 # 2202 2 3 2,630 $999 $5,800,000 V974510 # 701 3 4 3,130 $990 $6,450,000 V888573 # 2701 3 4 3,320 $1,278 $7,380,000 V975806 # 2402 3 4 3,470 $1,371 $7,480,000 Not sure how many $5,000,000+ apartments have sold so far this year in Vancouver,… Read more »