What a property index is - and isn't

MARKET rumblings have of late been heard each time a key residential price index is published. When URA's revised index showed a 1.1 per cent drop in overall private home prices for the first quarter of this year, market players groused again - not because the revised index didn't do its job of showing the broader trend but because it did not show the movement in prices that some were hoping for.

No doubt, a robust property price index is necessary to provide a sense of where the market is heading. But nowadays, many appear to expect the index to serve their own purposes.

Some developers believe that the index should have shown a bigger fall, reflecting the 10-20 per cent drop in prices that they see in selected pro…