House Price Indices Laurs Nørlund Director – National Accounts, Prices and Key Indicators Eurostat - European Commission

Housing in our life House Prices?

Need for real estate price statistics G20 Conference of Senior Officials – March 2011 « next crisis will come from land prices … »

Real estate prices played a major role in the financial crisis - bubble and effects on sub-primes but harmonised statistics on real estate prices (residential and commercial properties) were not available

Reaction of the official statistical community Challenge Detect, assess and forecast real estate prices Timeliness and reliability Set up a system G-20 Data Gaps Initiative

national accounts < short-term business statistics < Principal European Economic Indicators consumer prices < national accounts < short-term business statistics < labour market < external trade < housing indicators <

House Price Indices - HPIs Changes in the HPIs measure housing inflation HPIs describe the price development of all residential properties purchased by households HPIs cover both newly built and existing properties

Challenges in measuring House Price Indices Availability of data on dwelling purchases Prices based on transactions Properties are usually not sold very often

Challenges in measuring House Price Indices Paris Dwelling characteristics: Type of dwelling Size Location

Challenges in measuring House Price Indices Heterogeneity Virtually every dwelling is different In particular across Europe Need for quality adjustment

The answer: create a new official statistics Methodological framework Pilot projects Legal framework Regular compilation

Methodological and legal frameworks Methodology Handbook on Residential Property Price Indices Practical compilation manual Legislation

Compilation National HPI Administrative sources Land registers Real estate agencies surveys Financial institutions Construction surveys Compilation

Methodology Country 1 Country 2 Country 3 Country 4 European HPI National HPI Administrative sources Land registers Real estate agencies surveys Financial institutions Construction surveys National HPI Administrative sources Land registers Real estate agencies surveys Financial institutions Construction surveys

What is released? House price indices euro area EU Member States Annual and quarterly growth rates Indices

House Price Indices Euro area and EU – 2010=100

Different dynamics – HPIs, 2010=100

Differences across countries

Who will use the new figures? Markets EUROPEAN COMMISSION .. and citizens

Uses: Macroeconomic Imbalance Procedure Deflated HPI Nominal HPI divided by household final consumption deflator Alert threshold: +6%

Uses: links with other indicators

When? Quarterly releases Member States transmit data to Eurostat within 90 days after the end of the reference quarter Figures will be released around T+95/100 days after the end of the reference quarter Pre-announced in the Euroindicators release calendar In 2013 2012Q4: 11/04 2013Q1: 11/07 2013Q2: 10/10

Future developments Breakdown in new and existing dwellings House sales Handbook on Commercial Property Price Indicators

Thank you for your attention!