Euro area residential property prices

Euro area residential property prices: the aggregation of non-harmonised national data
Henning Ahnert and Adrian Page

The European Central Bank (ECB) regularly compiles an indicator for euro area residential property prices from non-harmonised national data and has recently established target definitions to improve the information. Main criteria used for selecting national components into the aggregate are geographical and market coverage, quality adjustment, and reliability of source data. In the absence of better quality harmonised indicators, it is difficult to precisely assess the reliability of the current index. Results from aggregating different national price series and using different country weights may, however, at least illustrate the potential error margins of the index. These margins are, compared to other euro area statistics, considerable, though it may be assumed that the price trend is correctly reflected and plausible. The most important and desirable improvements concern the quality of the primary statistics (coverage, quality adjustment) and the publication frequency of the euro area aggregate (from annual to quarterly).