Use of complementary administrative data sets for Australian house price indexes.
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Transcript of Use of complementary administrative data sets for Australian house price indexes.
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Use of complementary administrative data sets for Australian house price indexes
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Household borrowing
Household wealth
Housing
Other
Household Wealth and Wealth Distribution, Australia 2005-2006, ABS cat. no. 6554.0
House purchase and home ownership
65%
85%Policy makers, housing industry, households interested in a timely measure of house price change
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House Price Indexes, Eight Capital Cities (ABS cat. no. 6416.0)
•Since 1986•Quarterly•Free-standing houses•Eight capitals•National index – weighted average•Using median prices
Australian house price indexes (HPIs)
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x
xxx •Ideally based on
current and historical prices of all dwellings•Only a fraction is sold
Assumption: Median price of dwellings sold is representative of housing stock
HPI construction
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Time
HPI construction
Re-price representative house over timeNo two houses are identicalQuality may change
Need to control for compositional effects
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House characteristics
Price
Hedonics•Regression •Data not available
Repeat sales•Requires long time series•Quality may change•Peculiar characteristics ?
Stratification•Group dwellings
Controlling for compositional change
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Stratification
•Compare houses with similar attributes – next best alternative•Suburbs base unit•Cluster suburbs according to price determining characteristics•Maximise homogeneity but require sufficient sales
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Cluster- Suburb base unit
Structuralcharacteristics
Neighbourhoodcharacteristics
Locational characteristics
Current stratification
Socioeconomic index for areas (SEIFA)•High incomes•Tertiary education•Skilled occupations
•Number of bedrooms•Owner occupied•Houses
Distance to •CBD•shops•hospital
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Neighbourhoodcharacteristics
Long-termmedian price
New stratification
•Simpler approach•Better at controlling forcompositional change
Cluster- Suburb base unit
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•Current stratification – suburbs in same cluster in same statistical sub-division
Cluster location
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•Current stratification – suburbs in same cluster in same statistical sub-division•New stratification – this constraint relaxed
Cluster location
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Entire housing stock (not just houses sold)Median cluster price used to update cluster stock values
Weights
x
x
x
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Dates
Verbal agreement Contract signing
Contract
Exchange of contracts Settlement
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Dates
Contract
Exchange of contracts
most closely approximates the time at which the market price is determined
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Valuer General Mortgage Lender
Data sources
•Exhaustive coverage•Suburb, date, price
•Slow •Timely•Do not capture exchange date
•Loan approval data•Imperfect coverage
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Mortgage Lender
Benchmark series Updates
Valuer General
Time
Current quarter
Used for HPI up to 6 months prior to present quarter
Used to update HPI up to present quarter
Data sources
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• Extend scope from detached houses
• Possibly extend to regional cities and rural areas
Future developments