Content
About the statistics
Definitions
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Name and topic
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Name: Price index for new detached houses
Topic: Prices and price indices
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Responsible division
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Division for Construction and Service
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Definitions of the main concepts and variables
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The price used in the index is what the investor (final owner) has to pay for a new detached house excluding site value, or costs such as connection to road, water and sewer services, duties and administrative fees, and interest on building loans. VAT is included in the price calculation.
Time of measurement: The price is connected to the quarter in which the municipalities register the construction work as completed.
Detached houses includes detached houses with a bed-sit or basement flat, but does not include semi-detached house.
Utility floor space is the floor area measured within the outer walls. As defined in Norwegian Standard NS 3940 Area and volume calculations of buildings.
Price per square metre is calculated by dividing the price by the utility floor space.
Price zones: the municipalities are divided into three categories of price levels.
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Standard classifications
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Type of building is in accordance with the classification used in the the cadastre.
Administrative information
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Regional level
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National level
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Frequency and timeliness
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Quarterly. The index is usually published about 12 weeks after end of the quarter.
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International reporting
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Not relevant
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Microdata
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Data at the dwelling level are stored as text files on UNIX.
Background
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Background and purpose
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The purpose of the price index for new detached houses is to compile an output price index for construction activity. The index has been published since 1989 as an initiative by The Norwegian Financial Services Association (FNH).
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Users and applications
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The price index is currently financed by FNH. They use the index to regulate the insurance premium basis for residential buildings. Norwegian State Housing Bank and other financial institutions use the index to analyse and monitor price/cost changes. Statistics Norway uses the index to estimate output prices to deflate national accounts and to estimate the output of construction activities.
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Equal treatment of users
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Principles for equal treatment
No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 10 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calender
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Coherence with other statistics
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The price index for new detached houses differs from the building cost index in that it takes into account changes in productivity and profit margins.
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Legal authority
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The Statistics Act, Sections 2-1, 2-2 and 3-2
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EEA reference
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Not relevant
Production
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Population
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The population is all detached houses completed during the quarter, and the observation unit is detached houses.
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Data sources and sampling
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The data for computing the price index are obtained from two different sources: the Norwegian cadastre and a quarterly survey. The cadastre provides information on dwellings completed during the reference period; location, utility floor space and who the owner is. Through the survey Statistics Norway collect information about prices and quality characteristics that may have an influence on the price.
Complete census
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Collection of data, editing and estimations
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A questionnaire is distributed quarterly to all investors (final owners) of new detached houses.
The form-based survey is scanned optically. Mathematical and logical controls are incorporated in the data entry procedure. Machine control eliminates houses with very high or low square metre prices or areas. No recontact with the respondents.
The index is calculated using hedonic method with multiple regression techniques. A linear regression equation is chosen, with the price per square meter as a dependent variable. The variables used in the regression analysis correspond to characteristics that influence the price of detached houses. These comprise: utility floor space, geographic location, number of bathrooms, number of WCs, number of fireplaces, different types of self-built works, category of housing loan, ground site quality, ventilation and heating systems, sauna, central vacuum cleaner, tiled bathroom, development project, thickness of insulation, awning and main energy source. Observations from both the base year and the year before are used in the regression analysis to obtain more confident and stable estimates of the hedonic price function. The price elasticity is assumed to be constant for that period of time.
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Seasonal adjustment
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Not relevant
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Confidentiality
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Not relevant
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Comparability over time and space
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There has not been any major changes in the statistics back in time.
Accuracy and reliability
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Sources of error and uncertainty
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Respondents may misunderstand one or more of the questions on the form. The forms are read optically with automatic verification and transfer to electronic storage. Errors can occur during the optical scanning, particularly when reading figures consisting of many digits. Machine controls ensure, however, correspondence between partial costs and total costs, and that detached houses with very high or low square metre prices are not included in the calculation of the index.
The quality of the cadastre is important. Municipalities can make mistakes when registering data. There are also municipalities that, for various reasons, do not always follow the current registration rules in the cadastre. It may also happen that buildings are incorrectly classified, i.e. that a detached house has been given another type of building classification in the register. These detached houses will then not be included in the calculations. It can also happen that other buildings are incorrectly classified as detached houses. If so, the respondent usually gives notice. Due to registration delays in the cadastre, not all detached houses registered as completed during the quarter in question are actually completed during this quarter. Average delay measured in 2005 was 1.2 months.
Response rate is almost 75 per cent. The standard deviation due to non-response is normally calculated at between 0.5 and 0.7 percentage points.
Not relevant
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Revision
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Not relevant
The statistics is now published as Price index for new dwellings.