How Should We Measure Residential Property Prices to Inform Policy Makers?

Owing to newly available data sources for weighting from the 2011 Census of buildings and housing and data on the number of transactions and transaction values for Germany, this paper expands the previous method of calculating house price indices at the Deutsche Bundesbank with regard to weighting schemes. Starting from a methodological framework, this paper examines the distinctive purposes of house price indices and the appropriate information on prices and weights to be applied. The analysis then turns to assessing the differences in the weights as well as a comparison of the resulting price indices. The final section intends an empirical quantification of differences in the results