Commercial Property Price Indices and their Place in Official Statistics
Category: International Association for Official Statistics (IAOS)
Methods that are feasible for national statistics offices to implement for constructing commercial property price indexes (CPPIs) must overcome many challenges. Tracking the evolution of the average transaction price for a fixed-quality bundle of properties is generally not feasible. Furthermore, the frequency of repeat sales may be too low to implement repeat-sales methods, which are based on successive transactions in the same property. Typically, indices compiled in the private sector have been based on appraisals, but appraisals may suffer from subjectivity, as well as smoothing and lagging behind market price developments. Methods for constructing CPPIs from transactions data are therefore developed and demonstrated. Methods for decomposing the change in the CPPI into changes in the land prices and changes in structure prices are also tested. This decomposition is needed for national accounts purposes.