RP Data has defended its recent Home Value Index results, slamming one property analyst who referred to the data as “inaccurate” and “unreliable”.
Earlier this week, RP Data Home Value Index found national property prices had risen, on average, by 1 per cent in June.
However, moments after the report was released, SQM’s Louis Christopher slammed the data as “unreliable”.
“Their daily hedonic index, for which these claims are based on, is an unreliable index as it is based on a miniscule proportion of actual sales that happen on a daily basis. Effectively on a day to day basis, the index misses out on over 95 per cent of sales. And since it is an unrevised index, it means those missing sales are never taken into account,” Mr Christopher said.
Responding to Mr Christopher’s comments, RP Data’s national research director Tim Lawless said the Index in fact uses all available information.
“Yes all, not just for the current day, but also all historical data. The index then produces the best estimate of the current state of the market from this data. Where sales data is not received the day of contract exchange, it is not ignored or unutilised. It is used in statistical and mathematical methods to account for the timing difference between the sale date and the date we receive the information,” Mr Lawless said.
“If we receive information about a sale one week after it has occurred, we use that sale to update our current view of the market, mathematically taking into account that the sale occurred one week ago. The information in that sale is still very much relevant to determining the current state of the market and our models therefore incorporate it.”
Mr Lawless went on further to say RP Data’s results are frequently referenced by the nation’s largest and most respected industry bodies including the Reserve Bank of Australia.
“RP Data-Rismark indices are regularly referenced by the Reserve Bank of Australia as well as other Government departments and the economic community. Additionally, they are now the only house prices indices quoted in the Reserve Bank’s chart packs. We would presume these groups use our measure of housing market conditions because they are the timeliest and most accurate measures available.”
Furthermore, Mr Lawless said RP Data and Rismark are the only housing market index providers to have commissioned independent audits of their methodologies.