6416.0 - Residential Property Price Indexes: Eight Capital Cities, Mar 2020 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 16/06/2020   
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Quality declaration


Institutional environment

The Australian Bureau of Statistics (ABS) is independent of government, with the Australian Bureau of Statistics Act 1975 giving the Statistician the power to control the operations of the ABS. For further information on the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.


Relevance

Residential property prices are of significant interest to policy makers, market analysts and researchers for a range of economic and social reasons. This is because the housing market plays an important role in the Australian economy. The Residential Property Price indexes serve the dual purpose of:

  • a macroeconomic indicator of residential property price inflation
  • supporting the compilation of the non-financial assets component of the household balance sheet in the Australian System of National Accounts.

The Residential Property Price Index publication includes a suite of three indexes (referred to collectively as 'the indexes'):
  • the residential property price index
  • the established house price Index
  • the attached dwellings price Index.
These indexes provide quarterly information about the price change of the stock of established detached houses and attached dwellings over time, as well as an aggregated index. Separate indexes are produced for each capital city, and these are combined to produce a weighted average index of the eight capital cities.

To maintain the relevance of the indexes an index review is undertaken every five years, following the availability of data from the Census of Population and Housing. The quantities of dwellings that underpin the weights of the index are updated at this time. It also provides an opportunity to reassess the compilation methodology of the index. The most recent index review occurred in relation to the 2016 Census.

The ABS uses a stratification approach to compile the indexes. Dwelling transactions are stratified by dwelling type, long term median price and Socio-Economic Index for Areas score. Similar dwellings (not exactly the same dwellings) are priced each period, and changes in other characteristics of the dwelling stock are not removed from the price index. The change in the median dwelling transaction prices of these strata from quarter to quarter are weighted together to produce a measure of price change at the capital city level.

Estimates are also available of the median price and transfer counts of established houses and attached dwellings for capital cities and rest of state, in Residential Property Price Indexes: Eight Capital Cities.

Also published are statistics relating to the total value of the dwelling stock, and the mean price and number of residential dwellings by state. These indicators are used to estimate the value of housing as a component of wealth in the national accounts.


Timeliness


The Residential Property Price Indexes: Eight Capital Cities is released each quarter (three months ending March, June, September and December). The data are typically released approximately twelve weeks after the end of the reference quarter, in line with the Australian National Accounts: Finance and Wealth. Price observations are collected throughout the quarter and are classified into the relevant quarter depending on the date of exchange of contracts.

Index numbers are released as final figures at the time they are first published.

To enable the timely publication of data on the value of the dwelling stock, the movements of the capital city residential property price indexes are used as a proxy for movements in the state/territory mean prices for the most recent quarter. This results in preliminary estimates for the total value of the dwelling stock for this period.

Revisions to the total value of the dwelling stock are applied to both the second and third most recent quarters, due to updated completions and unit record residential property sales data becoming available to use in the direct calculation of quantity and price. The estimate for the third most recent quarter is considered final.

Once the indexes and total value of the dwelling stock estimates are final, revisions would occur only in exceptional circumstances, such as to correct a significant error.

The median price, and number, of all established house and attached dwelling transfers for capital cities and rest of state is published up to the current quarter. As more unit record residential property sales data is received for each quarter, the median price and the number of house and attached dwelling transfers are revised as necessary. Revisions can be made to the most recent ten quarters of published figures.

These revisions can be substantial, especially in the quarter immediately following first release, and accordingly the median price and transfer data initially published for each quarter should be interpreted with caution.

Accuracy

The accuracy of the indexes relies on the number of price observations available each quarter. All Australian residential property sales data are supplied to the ABS by CoreLogic. This dataset is a combination of residential property sales data obtained from state and territory land titles offices or Valuers General offices, and real estate agents' data provided to CoreLogic. The ABS applies classifications to this dataset to create the residential property sales dataset from which the price indexes and related statistics are produced.


Coherence

The first issue of the residential property price index in its current form related to the December quarter 2013. This series (Series 3) was based on data from the 2011 Census of Population and Housing and included updated weights and stratification variables which were linked to the previous series (Series 2) at the March quarter 2013. The house price index has a time series starting from the March quarter 2002. The attached dwelling price index and aggregated residential property price index have a time series starting from the September quarter 2003.

Prior to the December quarter 2013, the house price index was the only series published. In the December quarter 2008 issue, updated weights and a refined stratification method based on 2006 Census data were introduced and linked to the existing house price index series (Series 1) at the March quarter 2008. Series 1 was introduced in the September quarter 2005 issue (with improvements applied back to the March quarter 2002). The most significant change was the introduction of a stratification approach to compile the house price index.

An historical series, from 1986 to 2005, continues to be available as an indicator of established house price movements over a longer period. This historical series is not directly comparable to the existing house price index series post 2002, due to the significant changes in methodology introduced in the September quarter 2005 issue.

The most recent review of the residential property price indexes was conducted in 2018, with updates (including weights and stratification variables from the 2016 Census) introduced in the December quarter 2018 issue. The new price index series (Series 4) was linked to the previous series (Series 3) at the September quarter 2018.


Interpretability

The Residential Property Price Indexes: Eight Capital Cities contains explanatory notes which provide an overview of the scope, coverage, data sources and methodology of the published series. Appendices are included when appropriate (for example, to explain the outcome of a methodological review).

More detailed information about the technical aspects of the residential property price indexes and related statistics can be found in the Residential Property Price Indexes: Concepts, Sources and Methods, 2018.


Accessibility

All available data is released in the residential property price index publication and associated time series spreadsheets on the ABS website each quarter and can be accessed via the ABS website:https://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0.

For links to data and publications relating to the residential property price indexes and other prices series, please see Topics @ a Glance - Inflation and Price Indexes.