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ISCOVER
Staff Reporter
The Australian Securities Exchange (ASX) has teamed up with RP Data and Rismark to launch a daily home value index.
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Designed to be a tradable index, the RP Data-Rismark Daily Home Value index will replace the current monthly RP Data-Rismark Home Value index, and provide the most up-to-date measure of value movements across the Australian housing market.
The RP Data-Rismark Daily Home Value index is the first commercially-available residential index to track value movements across the market portfolio of all dwellings. Historically house price indices have only included dwellings that have been sold during the measurement period, by definition ignoring the vast majority of the housing stock.
The new index makes use of 'hedonic' methodology which includes analysis of the attributes of properties that are being transacted when calculating the value of the index.
Understanding factors such as the number of bedrooms and bathrooms, the land area and the geographic context of the property allows for a much more accurate analysis of true value movements across specific housing markets, Rismark International chief executive Ben Skilbeck said.
"The daily index is the result of three years extensive research and development. It is specifically designed for trading purposes and tracks the value of an investment in a self-financing market portfolio (all dwellings). That is, the index removes bias associated with capital injections such as those arising because of renovations, alterations and additions so as to examine true changes in market value," he said.
"The daily indices also remove compositional bias which plagues index construction techniques such as median and repeat sales."
RP Data research director Tim Lawless said Australia's residential housing market is worth an estimated $4 trillion, as such, it is important to have the best possible measurement of housing returns and rental yields.
"The latest methodological improvement from RP Data and Rismark International, who have already established their suite of hedonic indices as the benchmark measure, once again sets the bar for real estate analytics," he said.
"The daily index production is reliant on timely updates to RP Data's core database of more than 170 million property records including property transaction histories, real estate listings and property attributes.
"The new method for calculating capital movements provides a significant step forward in understanding housing market conditions across Australia."
