Year On Year Hpi Calculation

[Wankan]

Edit : Don't follow this thread unless you want to see me embarrass myself with my obviously knaff spreadsheet skills :-)

Sorry if this has been done to death but me having a thought is rare .

If you read the latest Rightmove report it will say the YOY increase is 4% . They come by this figure by adding the Dec'04 to Nov'05 monthly movements together .

Surely this is a bogus way of showing the annual percentage change as the actual figure is only 2.9% if calculated on a compounded monthly basis .

Do the others (Halifax , Nwide etc) use the same basis for their reports ?

Edited December 4, 2005 by Wankan

[zorn]

Sorry if this has been done to death but me having a thought is rare .

If you read the latest Rightmove report it will say the YOY increase is 4% . They come by this figure by adding the Dec'04 to Nov'05 monthly movements together .

Surely this is a bogus way of showing the annual percentage change as the actual figure is only 2.9% if calculated on a compounded monthly basis .

Do the others (Halifax , Nwide etc) use the same basis for their reports ?

The year-on-year change is not December to November, it's November to November. You only have 11 months in your year.

£190,329 in Nov 04. £197,855 in Nov 05. 3.95% YoY increase.

[Wankan]

Nope . I've got 12 months data with Nov'04 represented by the "opening balance" of £200,000 and 4% is the figure quoted by Rightmove .

[Quanty]

Sorry if this has been done to death but me having a thought is rare .

If you read the latest Rightmove report it will say the YOY increase is 4% . They come by this figure by adding the Dec'04 to Nov'05 monthly movements together .

Surely this is a bogus way of showing the annual percentage change as the actual figure is only 2.9% if calculated on a compounded monthly basis .

Do the others (Halifax , Nwide etc) use the same basis for their reports ?

It most certainly is dodgy.

If 200k is the Nov 2004 price and 205792 the Nov 2005 benchmark then the annual return is 2.8960% which is a monthly compounded rate of 2.8583%.

That's I guess why the people at Rightmove run a website not a bank.

[zorn]

Nope . I've got 12 months data with Nov'04 represented by the "opening balance" of £200,000 and 4% is the figure quoted by Rightmove .

Where are your figures coming from? They're all well over what Rightmove are actually reporting -- they've never gone above £200,000. Here's a direct cut and paste from their November 2005 report:

November 2004 154.9 -1.7% £190,329

December 2004 154.4 -0.3% £189,733

January 2005 154.2 -0.1% £189,509

February 2005 157.7 +2.3% £193,830

March 2005 158.6 +0.6% £194,962

April 2005 160.7 +1.3% £197,539

May 2005 161.2 +0.3% £198,147

June 2005 161.6 +0.2% £198,642

July 2005 160.0 -1.0% £196,649

August 2005 159.7 -0.2% £196,282

September 2005 159.0 -0.4% £195,407

October 2005 159.8 +0.5% £196,348

November 2005 161.0 +0.8% £197,855

Annual Change +6.1 +4.0% +£7,526

And the change from £190,329 to £197,855 is 4%.

Sorry if this has been done to death but me having a thought is rare .

If you read the latest Rightmove report it will say the YOY increase is 4% . They come by this figure by adding the Dec'04 to Nov'05 monthly movements together .

Surely this is a bogus way of showing the annual percentage change as the actual figure is only 2.9% if calculated on a compounded monthly basis .

Do the others (Halifax , Nwide etc) use the same basis for their reports ?

OK, if (as I suspect on thinking about it further) you have taken the (rather lunatic) option of saying "Well, if we suppose their figure was £200,000 in November 04 and we apply the twelve monthly changes to it, what do we end up with?", then you've done your spreadsheet wrong. Just look at your line for February, for example, where you have +2.3% but -£199. I think your columns have slipped out of line with each other.

The 4% figure is right and you are wrong.

Edited December 4, 2005 by zorn

[Wankan]

The £200k was used as any figure could be for what I was trying to show ie %

Yep, you're totally correct , I am totally wrong , I must try to remember , when doing a spreadsheet , to avoid doing so whilst enjoying a hangover .

I'll edit my opening statement so others don't waste their time reading .

Thanks for taking the time to reply

[Wankan]

I think I was trying to see if "they" were using the yoy figure in the following way :

For example :

House price at end of Jan £100,000

House prices increase by 1% in Feb .

House prices decrease by 1% in March .

Most people would say the house is now still worth £100,000 as it's 1% up and 1% down but it's only actually now worth £99,990 .

I'll never drink again .

Well until tonight anyway

Bad habit .

[zorn]

I think I was trying to see if "they" were using the yoy figure in the following way :

For example :

House price at end of Jan £100,000

House prices increase by 1% in Feb .

House prices decrease by 1% in March .

Most people would say the house is now still worth £100,000 as it's 1% up and 1% down but it's only actually now worth £99,990 .

Yes, but if you're dealing in fairly small percentages, it doesn't make a lot of difference. Only £10 in your example above, and a 0.5% increase every month for a year is 6.17% over the year instead of 6% -- the difference isn't really material.

[Wankan]

Yes, but if you're dealing in fairly small percentages, it doesn't make a lot of difference. Only £10 in your example above, and a 0.5% increase every month for a year is 6.17% over the year instead of 6% -- the difference isn't really material.

I've got to clutch at any straw to have ammunition in my arguements NOT to buy a house now . Aged parents are driving me nuts with their "You must buy now , they're being "snapped" up" bullsh!t , based on the TV .

I sure as hell ain't going to buy in this market.