Lies, damned lies and statistics

VancouverCondo.info linked to this disturbing article on the CBC's website today. It's a story about a survey that says Canadians are prepared to weather a housing price collapse -- conveniently they don't define what a housing price collapse looks like, and by they, I mean the RBC which conducted the study to support their business. It's actually quite blatant what they're trying to accomplish when you read the actual press release. Here's the synopsis:

• The vast majority of Canadians (90%) believe in home ownership, you should too
• The vast majority of Canadians (85%) have no trouble paying their mortgages despite record unaffordability and rising interest rates -- so don't worry about it and get yourself in over your head today too
• The major reason why most Canadians are motivated to buy soon is rising home valuations (26%) and rising interest rates (22%) -- they want to buy now before they're priced out forever, very smart folks these, use our handy online calculator
• BCers are most likely to want to buy new rather than used, most likely to buy before they're priced out forever and more prone to group think "buy now, buy now, use RBC, use RBC, buy now, buy now"

So yeah, the RBC release was a bit much in my opinion. But fair enough, we've come to expect this from business, so our spidey senses tingle and we read it for what it is. Note to RBC: in the future, if you want to have your press release turned into a news story without the inconvenience of edits for balance, send a box of chocolates and a bouquet of flowers to the fine folks over at the Times Colonist. They're well trained in the finer aspects of RIGHT CLICK>CUT and RIGHT CLICK>PASTE.

The CBC, well in this case, they did try to inject some balance into the story by using RBC's inconvenient survey contradictions against them. While RBC is currently saying Canadians are having no problems buying and paying for their houses, they didn't ask how the effects of doing so are impacting other important financial activities: like actually saving real money. Thankfully for us, back in October, RBC did ask Canadians that question and thankfully someone at the CBC (likely an industrious intern; they always go above and beyond) Googled for some balance (was that so hard?). Here's what they found:

• 58% of Canadians can't save what they think they ought to
• 38% of Canadians can't save at all

But the intern(?) didn't stop there. Industrious little folks, not content to wait for the established players to retire off and open a career path for them; nope, I tell you, these new-fangled millennial careerists are go-getter's who are going to manage the news desks sooner than the previous generations did; picked up the phone (not likely), or e-mailed (they're tech savvy), CAAMP to get a second opinion! And what did CAAMP tell them?

• "Housing market crash? You're making a big deal out of nothing, there's nothing to see here, we're not like Americans and we didn't load up on mortgage debt over the past decade"
• Only 2000 Canadian households would face foreclosure if interest rates rise
• The Canadian mortgage market expanded by 10% this past decade

There's an old saying: there's lies, damned lies and statistics. In this piece, I've pointed out the lies and those last couple of bullet points are most definitely a damned lie (or it could be a misquote). Here's the statistics:

Does that look like 10% over the past 10 years to you? It's actually more than double. Maybe CAAMP meant 10% per year over the past 10 years?

What about last year when CAAMP told us that 16% of Canadians couldn't weather a $300 increase in mortgage payments and that 11% of Canadians couldn't weather a 1.5% rise in interest rates (source)? That surely will impact households significantly and a great many more than 2000 homes could (will) be forced into foreclosure.