PhD Mihai Gheorghe
National Institue of Statistics
Abstract
The measurement of residential property price constitute distinct challenges for compilers. Residential property is by nature very heterogeneous and is traded infrequently. In normal times this already presents challenges in the observation of transaction prices for comparable houses. Compiling residential prices during times of crises, e.g. when the volume of transactions decreases sharply from the normal level, is even more challenging.
Monitoring the property prices is important as boom and busts in real estate markets affecting the real economy through a variety of channels and can be an important source of macroeconomic imbalances
Research has been conducted intensively, particularly after the recent crises, on methods of compiling housing price indicators appropriately. The location, history and facilities of each house are different from each other in varying degrees, so there are no two houses that are identical in terms of quality. Even if the location and facilities are the same, the age of the building may differ, in which case the degree of deterioration varies accordingly and the houses are not identical. In other words, houses have particularity with few equivalents.
The appropriate methodology applied for construction of property price statistics and its coverage is influenced by the type of uses.
This paper focuses on the potential uses of residential property prices from the individual household’s and macroeconomics perspectives and on the hedonic method used to compile the regional property prices level on a comparable base.
Key words: residential property, hedonic method, characteristic of housing, comparative price level
