CoreLogic New Zealand replaces house price index with new gauge

CORELOGIC New Zealand is introducing a new measure of real estate values that it said will reflect changes in the housing market sooner.

The Home Value Index (HVI) will replace the House Price Index (HPI) on Aug 1, when July data are published, CoreLogic NZ head of research Nick Goodall said. The HVI will be a timelier, less volatile index that identifies market inflection points more accurately, he said.

The new index uses a so-called “hedonic” methodology to estimate home values by breaking them down into constituent characteristics such as the number of bedrooms and bathrooms, floor area, land size and location. CoreLogic already uses this method in Australia.

The old index used a Sales Price Appraisal Ratio or SPAR method, which compared sale prices to appraised values provided by government agencies.

Key changes:

• The HVI will provide a median home value; the HPI provides an average.
• The last 12 months of the HVI will be routinely revised, though revisions are unlikely to be noticeable beyond the prior month or two.
• The HVI data series will date back to Jan 31, 2018. BLOOMBERG