- By leaving the reporting to a public body, we risk making the statistics more expensive, slower and less frequent, writes professor Erling Røed Larsen of Eiendomsverdi As.
In Dagens Næringsliv the 18th of September, Randi Flesland of The Consumer Counsil, proposes to take the housing price statistics from the brokerage firms and Real Estate Norway. She wants to give it to Norges Bank or Statistics Norway (SSB) because she fears that the figures can be manipulated or exploited. She also believes that monthly reports are unfortunate and will reduce the frequency to 2-3 times a year.
First and foremost, this testifies to how good the housing price statistics is. It appears to be of such high quality that it is confusingly similar to what Flesland believes is about public statistics. In reality, this is private statistics - produced and supplied by private players. The statistics are the result of a collaboration between Real Estate Norway, Eiendomsverdi and Finn.no.
Flesland's input contains several points that are apt to mislead or confuse, so there is a great need for clarification.
1. Independence. It is not possible for anyone - not even brokers - to influence number production. Eiendomsverdi AS has established a methodology that every month analyzes the exact data set in exactly the same way. Eiendomsverdi AS stands for construction and metrics, and is a neutral partner with no self-interest in what direction individual statistics are taking.
2. SSB. They already provide quarterly house price statistics. It is available to everyone at ssb.no.
3. Frequency. Had the statistics been delivered 2-3 times a year, someone must have started a monthly delivery plan. And that's exactly what we've done - and are doing. In the modern economy, indices of all kinds are extremely important navigation instruments, and they provide invaluable information to actors trying to maneuver. The home buyers use the statistics to make up their mind whether to buy, where to buy - and whether to buy or sell first. Banks use housing price statistics in credit practices. The financial environment uses the housing price statistics. It is not enough to look at the speedometer once an hour when driving a car, and similarly it does not keep looking at the house price statistics once every six months when you want to move in the housing market. During the financial crisis, everyone had fumbled in blindness.
3. Extensive. The three-party collaboration enables a broad spectrum of statistics for broker-based transactions announced through Finn.no. The report contains price indices, price levels, activity levels, number of ads, unsold dwelling times and ad age. This is very important information for the users - which is indicated by the interest and the effort, not least noticeable at the press conferences.
4. Quality. The most important information is the house price index. It tells how the price trend is for completely comparable housing. Constructing such an index is a professional challenge - and international research is intensively researched on various methods. We use a SPAR method that incorporates both observed prices and model-estimated prices. The undersigned regularly attends international research conferences, and can report that many in other countries want something similar.
5. Private. The three-party collaboration uses the data we own. Brokerage firms have the right to prepare content on the basis of the brokers' activities - on a par with e.g. Statoil when reporting from its activities. The brokerage firms have even engaged an independent analysis company to handle the work.
6. Security. The delivery holds the highest level of security - and only a handful of people know the content ahead of the press conference.
Conclusion: By leaving the reporting to a public body, we risk making the statistics more expensive, slower and less frequent.
An abridged version of this post was printed in DN on September 22, 2014.