Property Price Index Development

This project conducts an initial exploratory analysis (“Stage 1”) investigating the construction of a property price index based on data resources available to PEXA. Different econometric methodologies used to construct house price indices will be explored. An extensive literature review will be conducted on the existing approaches for constructing such indices. Their advantages and disadvantages will be assessed, along with their suitability given the resources available to PEXA. It is envisaged that the exploratory analysis will include an assessment of such features as spatio-temporal modelling, selection biases and endogeneity correction in sales data, data fusion for combining multiple datasets, and the potential for nowcasting a distributional index. A clear plan for how to operationalize the house price index will be part of the report.