2021_DE_Real_Estate_Statistics

ended

Economic and monetary policy makers, especially central banks, need accurate, timely and frequent information on the developments of the real estate markets to implement data and evidence based policies. Questions concerning the measurement of inflation in general and the consideration of real estate prices in the European inflation measurement (HICP) in particular have been taken up by the German media and are now concerns not only to institutional data users, but to the general public. According to the press release of the European Central Bank (ECB) of 8 July 2021 on the review of the monetary policy it is likely that the costs for owning or buying a house shall be integrated in the HICP by means of the index for owner occupied housing (OOHPI) in the future. In Germany, this index is currently only available at quarterly frequency and with a time lag of t+85. To be integrated into the HICP a monthly and timelier index would be needed. Against this background, the proposal suggests the work on two activities that are named as objectives in the call: Activity 2 and Activity 3. The first activity aims at the Development of an HPI and/or OOHPI at monthly frequency and with improved timeliness. Starting point are the sub-indices with the largest weight in the OOHPI: construction prices, which represent the largest part of O.1.1.1.2 “Self-build dwellings and major renovations” and account for about 70% of the total O.1 index. The second sub index concerned is O.1.1.1.1, “Purchases of new dwellings” which accounts for approx. 11% of the OOHPI and is represented by the HPI subindex for new dwellings. Work package 2 and 3 deals with this activity. The second activity aims at improving the OOHPI weights. In order to possibly include the OOHPI into the HICP and improve the general quality of the OOH, the weights should be in line with what can be foreseen as part of the new implementing act.