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Eurostat Delayed In Delivering House Price Data

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Eurostat delayed in delivering house price data

By Simon Briscoe

Published: July 20 2008 17:09 | Last updated: July 20 2008 17:09

The technical and definitional problems associated with collecting house prices and creating an index are largely surmountable, witnessed by the fact that several countries have perfectly reasonable measures. Some, most notably the UK, have more measures available than needed – none might be perfect but most of them move in the same direction most of the time and the broad trend is clear. So the problem mostly boils down to some countries giving such data a low priority.

The task of encouraging countries to produce decent figures has been left to Eurostat, the EU’s statistical body. A spokesman says: “The project to develop house price indices is a very high priority for Eurostat and it is in general progressing well.” He adds that the project “is one with a long duration, primarily due to its methodological and technical complexity and the need to agree on a harmonised approach to give comparable results, knowing that housing markets, data sources and data availability vary considerably across Europe.” Even so, the body seems to have failed to deliver adequate results with deadlines for data publication being missed.

Successive meetings of Eurostat’s statistical programme committee (SPC), from at least a decade ago, have sought progress – with only limited success. The original interest in property prices was to derive a component for the CPI that would allow for owner-occupied housing to be included, but the remit has now been extended to create – perhaps more simply – a house price measure in its own right. A dozen member states including all the large ones (whose figures would have a major impact on the Euro area aggregate figure) have been included in the pilot work that aims to produce a monthly or quarterly measure of new and second-hand owner-occupied properties, and that is now being rolled out to other member states. But nothing is yet in the public domain.

A meeting of the SPC in February 2007 noted the late delivery of the project. The responses from France, Italy and Spain were seen as a particular concern given their importance in the Euro zone. But even so, and despite progress in some countries, Eurostat had hoped to have EU-wide data in the public domain by now. Nothing is now expected within the next two years. The costs would not seem to be prohibitive – set up costs in one Eurostat paper were estimated at between two and eight man years and running costs between one and six man years depending on the country and what is already done.

The FT tries now to plug the gap by publishing in one place the data that are available. The figures we publish are a hotchpotch: countries have different statistics for different time periods – monthly, quarterly, half-yearly and annual – and publish them with varying time-lags. They are based on different types of data source – land registry, surveys or lenders’ valuations – and compilation methods. Data come from different parts of the house buying process – asking prices are different in nature from banks’ valuations, which in turn are different from registered selling prices. Each can be influenced at the margin by factors other than the value of the house – optimism/pessimism, business pressures and tax considerations.

This has left users that seek international comparisons cobbling together these essentially incompatible data to make the best job possible of assessing different countries’ trends. The ECB has compiled an indicator for euro-area residential property prices but it is only an approximation given the substantial differences between the national sources making up the aggregate and the fact that some national sources fall short of the ideal measure. The BIS constructs a composite asset prices index combining house and other property prices with equity values. The resulting index is a welcome addition to the set of statistics available for policy relating to monetary and financial stability, but it is clear that further refinements and better data relating to residential property would increase the relevance of the index.

No HPI component for the CPI then for a while.

Edited by Ash4781

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  • 396 Brexit, House prices and Summer 2020

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      • down 5% +
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