1. Handbook on Residential Property Price Indices
Chapter 10: Data Sources

2. Chapter 10: Data Sources
Chapter 10 examines the different sources of data that can be used for constructing RPPIs
Such as newspapers, real estate agents, mortgage companies, property registers, and tax offices (mainly readily available)
It focuses mainly on price data
Data sources for prices often act as a constraint. For example
Timeliness
Revisions
Techniques available to quality adjust for houses of different sizes & locations
Final section discusses situation confronted in many developing countries where
Data are scarce; Ownership is a fuzzy notion; No easy solutions
Input prices as an alternative?

3. Chapter 10: Data Sources
Administrative information is main data source for most compilers
A function of the house price data-sets generated by a country’s legal & administrative processes associated with buying a house
Resulting index numbers can vary according to
Data source e.g. purchase price when financed by loan versus purchase price for cash sale
Can effect price levels & trends
The point in the house purchasing process at which the price is measured
E.g. Advertised price, initial offer price or actual purchase prices
Lack of detail can be problematic
For example, the inability to quality adjust - particularly problematic where there is a lack of homogeneity, as in the case of the residential property market (e.g. Hedonics &/or mix-adjustment)
Purpose designed surveys costly
Unless conducted for other purposes e.g. Property valuations for taxation purposes (but valuations are not purchase prices)

4. Chapter 10: Data Sources – administrative data generated by house sales/purchases
Chapter 10 lists the relative advantages/disadvantages of different data sources
Definition, coverage (e.g. mortgage purchases only), timeliness, revisions, reliability, detail (e.g. for mix/quality adjustment)
Multiple data sources can lead to competing indices from different sources
Different trends in house prices
Key to successful use of administrative data
Detailed knowledge of data collection processes & operational systems & user needs

5. Chapter 10: Data Sources
To gauge fitness-for-purpose requires an evaluation against user needs
Chapter 10 lists of desirable properties for a residential property price index
Frequency; Revisions; Coverage; Quality; Timeliness; Detail for quality adjustment and mix-adjustment; Comparability (International comparisons)
Data integration?
E.g. Model relationship between valuations by mortgage lenders & final transaction price recorded by Land Registry

6. Chapter 10: Data Sources
Diagram: House purchase timeline and house price indices (UK)
Source: Bank of England and ODPM

7. Chapter 10: Data Sources Asking price
More timely but uncertainty & haziness regarding data sources & uncertain relationship between asking price and selling price
Initial offer price accepted by seller: mortgage companies
Uncertain relationship between initial offer price & transaction price & between mortgage versus cash purchases
Valuation price for loan: mortgage companies
Valuations tend to be cautious in downturn
detailed survey of the property reveals that substantial repairs are necessary
Process of re-negotiation?
Final transaction price: mortgage companies
Not always recorded by mortgage lenders

8. Chapter 10: Data Sources
Final transaction price: administrative data – property registers and tax offices
trade-off between timeliness and accuracy
Valuation price for taxation and payment for local services: tax offices
Can be out-of-date & general approximations
Expert opinion (soft information): surveys of estate agents organisations, other professional bodies and their members
Objective but judgemental

9. Chapter 10: Data Sources – & finally expenditure weights
Different weighting schemes produce price indices which measure different concepts of house prices and house price movements
Whether an index is “stock” or “transaction” weighted
Whether volume or value weights are used
Important to have clear understanding of what the target measure
So that the indices can be evaluated against the target measure to determine fitness-for-purpose

10. Chapter 10: Data Sources
The End