House Price Measurement in New Zealand and Australia

Frances Krsinich - Statistics New ZealandMark Dubner – Australian Bureau of Statistics

10 –12 May 2010Joint ILO/UNECE meeting on CPIs

Introduction

Stocktake of measures in NZ and Australia

Different dimensions:- quality adjustment- timing- weighting- coverage

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Introduction

Long run trends are similar across measures (within each country)

Short term movements vary

Eurostat guide

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Quality Adjustment

Composition of sales vary each period

Common methods:- hedonic regression- mix-adjustment / stratification- repeat sales- (SPAR used in NZ)

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Quality adjustment

Can only adjust for characteristics we have data on

Repeat sales – ‘like with like’ – but some issues

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Timing

Timeliness versus accuracy

Different points at which price can be captured:- sale agreed- finance approved- contracts exchanged- settlement

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Weighting

What are we trying to measure?

Weights required to adjust sales data to stocks

In practice – may not make much difference (examples…)

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Australia

ABS house price index- stratified- also project homes

Private organisations- APM - stratified medians- Residex – repeat sales- REIA – medians- RP Data Rismark – variety of methods- Commonwealth Bank – first home buyers

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Australian measures – long term

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Australian measures – short term

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New ZealandNo official house price index

New homes – home ownership in NZ CPI

Quotable Value- quarterly- accurate (SPAR method) but late (3.5 months)

REINZ- monthly- less accurate (national median) but timely (2 weeks)- new stratified approach, tracks QV well

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New Zealand measures – long term

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New Zealand measures – shorter term

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New Zealand and Australian measures combined

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