1. Use of complementary administrative data sets for Australian house price indexes

2. 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

3. 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)

4. x x x x 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

5. Time HPI construction Re-price representative house over time No two houses are identical Quality may change Need to control for compositional effects

6. 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

7. 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

8. Cluster - Suburb base unit Structural characteristics Neighbourhood characteristics 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

9. Neighbourhood characteristics Long-term median price New stratification Simpler approach Better at controlling for compositional change Cluster - Suburb base unit

10. Current stratification – suburbs in same cluster in same statistical sub- division Cluster location

11. Current stratification – suburbs in same cluster in same statistical sub- division New stratification – this constraint relaxed Cluster location

12. Entire housing stock (not just houses sold) Median cluster price used to update cluster stock values Weights x x x

13. Dates Verbal agreement Contract signing Contract Exchange of contracts Settlement

14. Dates Contract Exchange of contracts most closely approximates the time at which the market price is determined

15. Valuer GeneralMortgage Lender Data sources Exhaustive coverage Suburb, date, price SlowTimely Do not capture exchange date Loan approval data Imperfect coverage

16. Mortgage Lender Benchmark seriesUpdates 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

17. Extend scope from detached houses Possibly extend to regional cities and rural areas Future developments