House Price Measurement in New Zealand Australia Frances

House Price Measurement in New Zealand Australia Frances Krsinich - Statistics New Zealand Mark Dubner – Australian Bureau of Statistics Joint ILO/UNECE meeting on CPIs 10 – 12 May 2010

Introduction Stocktake of measures in NZ and Australia Different dimensions: - quality adjustment - timing - weighting - coverage 2

Introduction Long run trends are similar across measures (within each country) Short term movements vary Eurostat guide 3

Quality Adjustment Composition of sales vary each period Common methods: - hedonic regression - mix-adjustment / stratification - repeat sales - (SPAR used in NZ) 4

Quality adjustment Can only adjust for characteristics we have data on Repeat sales – ‘like with like’ – but some issues 5

Timing Timeliness versus accuracy Different points at which price can be captured: - sale agreed - finance approved - contracts exchanged - settlement 6

Weighting What are we trying to measure? Weights required to adjust sales data to stocks In practice – may not make much difference (examples…) 7

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 8

Australian measures – long term 9

Australian measures – short term 10

New Zealand No 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 11

New Zealand measures – long term 12

New Zealand measures – shorter term 13

New Zealand Australian measures combined 14