Eu Recognises Need For Comparable House Price Indices
News Posted On: 16 May 2011
A draft law could see EU member states forced to publish comparable house price indices on a quarterly basis from the second quarter of next year. The bill is part of efforts to synchronise the consumer price indices of member states so that inflation can be measured more accurately in the bloc.
Despite the fact that the bill is still a long way from becoming law -- still being called by its unofficial name Technical manual on owner-occupied housing for Harmonised Index of Consumer Prices because it is yet to receive a code -- some are already preparing for the change. Last week Ireland's Central Statistical Office (ICSO) launched a new house price index which will be in compliance with the changed requirements.
Paul Crowley, press officer with the ICSO, told OPP that the consumer price indices across the member states were about 90% harmonised, and that this move would bring everything a step closer.
A comparable index will certainly be of benefit to investors, and anyone else with a vested interest in housing prices in the EU. Currently there are a vast number of indices, each measuring house prices in a different way and with many -- often hidden -- caveats; some are before inflation, some after, some using asking prices, some sale prices and some mortgages.
Spain stands out as a prime example of the need for such an index. According to the Spanish government house prices have fallen by a little more than 10% over the past few years, but a wealth of other sources and, quite frankly common sense tells us that it is much more than this figure.
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