Through incompetence or by design, real estate boards are inflating sales numbers and giving Canadians false data. “If this were the stock market,” says veteran real estate pro Ross Kay, “these guys would be going to jail.”

How is this possible? Isn’t this the data upon which governments and central banks base policy decisions, which has a massive impact on public perceptions and market momentum? Is there actually evidence sales numbers are being pumped up, then used as proof of a housing boom despite higher mortgage rates, tighter lending and record debt?

Well, look at this (click to enlarge):

Go to realtor.ca. Zoom in on Burlington, Ontario, for example. Go to ‘Gallery view.’ See for yourself. Above is a screen shot of listings that pop up – in duplicate or triplicate. The town house unit at 2301 Cavendish Drive is listed three times – with separate MLS numbers. The one with no letter before it is with a local board, while the ‘W’ is a listing on the Toronto board and the ‘H’ lists it with the Hamilton board.

Three listings, one house. And when it goes – one sale, but three transactions, pumping up the numbers of three real estate boards. In fact, days ago the Toronto Real Estate Board reported a juicy August, saying: “Greater Toronto Area REALTORS® reported 7,569 residential transactions through the TorontoMLS system in August 2013. This represented a 21 per cent increase compared to 6,249 sales in August 2012.”

But should a town house changing hands in Burlington, 60 km and an hour’s drive away, really be counted as part of the “TorontoMLS” system? “In the GTA the double-listing of properties is now epidemic,” says Kay, “and of all boards across the country, TREB is the biggest culprit.”

But there’s more deception. Let’s slide west to the hottest real estate market in the country – at least as reported by the local realtor cartel – in Calgary.

This baby’s smokin’, according to what the Calgary Real Estate Board is telling buyers who are increasingly desperate to find a home in a tight market. “Residential sales within city limits totaled 2,196 units, a 27.5 per cent increase over 2012 and 8.7 per cent on a year-to-date basis,” says CREB. “Housing demand has been supported by another year of strong migration levels, improving employment and wage growth,” says board economist Ann-Marie Lurie (she did not return my call today). “Same ol’, same ol’. Price & sales continue to make significant year-over-year gains,” says realtor Mike Fotiou, on his Calgary real estate blog.

But did sales really surge 27.5% year/year last month?

“No way,” says Kay, who has just finished a board-by-board audit of published stats. “This is false reporting, because the very nature of what’s being counted has changed.”

At the heart of it is a federal Competition Bureau ruling that private sales can appear co-mingled with broker sales in MLS numbers, since companies like ComFree now list on the realtor system, while PropertyGuys runs mirror listings through registered brokers. The result – a growing number of sales in Canada are classified as private transactions, but appear in real estate board numbers. That’s cool. A sale is a sale. But what’s misleading is that this year’s numbers (including private sales) are being compared with last year’s deals (that don’t).

Says Kay: “If CREB removes the 317 private sales in August not similarly counted last August, total sales are really up 14.24%, not 27.5%. And removing private sales from listing means there are only 6,447 active listing snow – a 28.17% decrease.

“Now add flooding into the equation, plus the government buy-out of flood plain homes, plus a further bump in interest rates necessitating quicker purchases by the pre-approved mortgage folks, and you have it… the perfect storm, a trap for homebuyers, during the months of July, August and September.”

Above is an example. The house at 231 9th Ave. NW is being sold privately by Lisa Evers for $1,850,000. The listing is here. But it’s also listed by Re/Max Real Estate (Central) on MLS, for $1,795,000. That listing is here. When it sells (good luck, Lisa!) it will be added into CREB’s list of MLS transactions completed, and contrasted with the same number last year, when private sales were not counted.

By the way, removing private sales, comparing apples-to-apples, Calgary sales for the year to date are 18,589, not the 21,733 reported. That’s a year/year decrease of 5.92% – a far cry from the 10.17% increase claimed by CREB. “The only reason prices have increased in Calgary,” says Kay, “as is true in every other city where they’ve climbed, is historically-low listing inventory, even as demand for homes falls.”

Well, judge for yourself. Multiple listings and multiple reportings of a single sale. Inclusion of transactions in distant communities as local deals. Year/year comparisons based on different data. Inflated numbers, and no disclosure. How can we believe what we’re being told?

“This time the real estate correction will be far worse than it was in the early 1990s,” says ex-realtor Kay. “When you look at the dynamics involved, how people think we are different from the rest of the world, I have no idea.”