Introduction to the RPNZ - Rismark Indices

RPNZ and Rismark International ("Rismark")* have combined to

launch a highly accurate and timely suite of world-class property price indices that will transform the way New Zealand measure and understand changes in the value of residential real estate over time.

These indices will be known as the "RPNZ-Rismark Indices". A number of the indices are the first of their kind to be released for commercial use in the New Zealand and global markets.

The RPNZ-Rismark Indices will be available on a monthly and quarterly basis for every geographic demarcation including suburb, postcode, capital city and state in New Zealand. They draw on the most comprehensive property database in New Zealand and are computed using some of the most advanced global index construction techniques.

Special customised versions of the RPNZ-Rismark Indices are also available. These are made up of property sales data relating to the latest possible month.

The RP Data-Rismark Indices have been independently audited by the Securities Industry Research Centre of Asia-Pacific ("SIRCA"), which is a not-for-profit financial services research organisation involving twenty-six collaborating universities across Australia and New Zealand. In its review of the RP Data-Rismark indices, SIRCA concluded:

"...the results of our analysis indicate that the stratified median price, hedonic and repeat-sales property price indices developed by RP Data-Rismark represent a material improvement over the simple median price series that have historically predominated in the market. In this regard, it is pleasing to see private sector organisations that are committed to undertaking sophisticated residential real estate research and advancing our otherwise crude understanding of this complex market."

In addition to the SIRCA audit, Moody’s Economy.com, which is a leading global economics research organisation, has also undertaken an extensive review of the methodology, data and procedures used by RPData-Rismark to construct house price indices.

The Moody’s report’s summary findings, which were authored by two economics PhDs, are as follows:

“The suite of indexes calculated by RP Data-Rismark represents a significant improvement in the quality of housing price statistics available.”

“We look forward to seeing these indexes as they are released and believe that they will quickly take a central place in the macroeconomic data framework.”

“These data are more sophisticated, detailed and have better coverage than that used in the construction of existing housing price indexes. The high quality of the data makes it possible to implement not only median price and repeat sales indexes but also hedonic indexes, which up to this point had proved difficult to construct due to data constraints”

Other comments from the Moody’s report include:

“Perhaps the most exciting methodological development is the introduction of hedonic price indexes to the market. This approach to price index construction controls for compositional change by obtaining information on housing characteristics (e.g. bedrooms, bathrooms, land size, suburb, etc.)...”

“Through their Strategic Alliance with RP Data, Rismark has access to arguably one of the best databases available anywhere for the construction of hedonic indexes.”

“The adoption of the hedonic approach means that a better balance can be achieved between sample coverage and adequate control for compositional change. Hedonic methods potentially offer an improvement over the house price measures currently available.”

You can purchase the RPNZ-Rismark Indices here, or contact one of our consultants to find out more here.