Why you should use
Residex House Price Indices
- Residex House Price Indices cover the full market
- Unlike other calculation methods, which use only those properties that recently sold (median price index), those properties that have already been established and sold previously (repeat sales index), or those properties with detailed attribute data (hedonic index), the Residex indices use all properties in the market to determine market movements.
Residex’s ability to use the full market in the calculation of its house price index is vital in preventing skewed results which overshoot or undershoot true market movements and values. Without full market coverage, you’re not getting the full picture. - Residex House Price Indices are accurate
- Any housing market has some natural “true” volatility. That is, the market does not grow at the exact same rate from month to month. However, this true volatility is often swamped by “index calculation volatility” — ie, volatility introduced solely by the methodology that has been used to generate the house price index. Residex has undertaken research that measures the amount of true volatility in a market and the amount of index calculation volatility caused by using a variety of different index calculation methods. We have constructed our index in such a way that the volatility caused by the index calculation method is removed, leaving only an accurate and true representation of the underlying market movements.
Company A Uses the Repeat Sales method, and has quarterly index figures available. Company B uses the raw median sale price, and their indices are available on a monthly basis. Companies A and B are alternative data providers.
- Residex House Price Indices are timely
- The latest figures for each month are available within three weeks of the end of that month. We are able to do this because of our ability to calculate accurate results from a smaller data set than other index calculation methods require. This allows us to calculate monthly series, as opposed to the quarterly series some other index calculation methodologies are limited to.
- Residex House Price Indices are available at a suburb level
- Because the Residex House Price index methodology has been specifically designed to work using smaller amounts of data than other index calculation methods. This means we are able to construct robust, reliable indices even at a suburb level, where sometimes very few sales occur.
- Residex House Price Indices are non-revisionary
- Residex’s calculations of market growth don’t require revision as future data comes in. Other indices (most notably the “repeat sales” index) require constant revision, by the very nature of their calculation method. While in most cases, the revision is relatively minor, it is obviously preferable to use an index that gets it right first time.
- Residex House Price Indices are long-term
- Residex indices go back to the 1970s for the largest Australian states. Other capital cities go back almost twenty years.
- Residex House Price Indices have been designed for trading
- Residex House Price indices have been developed specifically to be the basis of financial instrument development and mortgage-related product development.
Residex House Price Indices are the result of almost twenty years of ongoing research into the housing market. Over those years, we’ve come to understand both the obvious and the extremely subtle difficulties and challenges in building accurate and robust house price indices. Developing accurate measures of house price movements is a challenging task, and one that requires dedication and experience to solve correctly.
Now you can benefit from our long-term experience and dedication to understanding how best to measure housing markets.
Residex capital city indices are now available, free of charge.
If you are looking for a specific index at a suburb level, please email
, or call us on (02) 9409 0333.