2020-03-13

Definitions

Name and topic: Name: Price index for new dwellings
Topic: Prices and price indices

Next release: 22 November 2024

Responsible division: Division for Housing, Property, Spatial and Agricultural Statistics

Definitions of the main concepts and variables

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.

Multi-dwellings:

The price is the sales price for the consumer, including the value of the estate, VAT and other taxes. For dwellings in housing co-operatives the deposit and joint debt are both included in the sales price.

The price refers to the point of time when the contract is signed.

Detached houses:

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.

Price zones: the municipalities are divided into four categories of price levels based on price observations in the time period 2004-2013.

Standard classifications

The multi-dwellings are divided in two groups:

Block of flats
Small houses containing more than one dwelling like row houses, terraced houses, semi-detached houses etc.

Detached houses includes detached houses with a bed-sit or basement flat, but does not include semi-detached house.

Type of building is in accordance with the classification used in the the Cadastre.

Administrative information

Background

Background and purpose

The purpose of the index is to measure the price development of new dwellings.

Price Index for new dwellings consists of two different price indexes: Price index for new multi-dwellings and Price index new detached houses.

The Price Index for new multi-dwellings was first published in 2015, with a time series back to the first quarter of 2011.

Price index for new detached houses has been published since 1989 as an initiative by The Norwegian Financial Services Association (FNH).

Users and applications

The price indexes are important indicators for housing constructors, financial institutions, government and others interested in the housing market. In European context, Eurostat is an initiator for harmonized house price indices. Norwegian State Housing Bank and other financial institutions use the index to analyse and monitor price/cost changes.

Equal treatment of users: No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 8 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar.

Coherence with other statistics

The price indices for new multi-dwellings and new detached houses are not fully coherent because the when the former measure the price on the sales point the latter measure the price at the completion date The sales point could refer to any point in the construction process, even before the actual construction starts.

The price indices for new multi-dwellings and new detached houses are not coherent with the construction cost index, the latter does not include changes in productivity and the profit margin.

Legal authority: The Statistical Act §2-2, § 2-3 and § 3-2.

EEA reference

Council regulation 2494/95 (concerning harmonized indices of consumer prices) and Commission regulation 93/2013 (concerning establishing owner-occupied housing price indices).

Production

Population

Multi-dwellings:

The population is all new multi-dwellings that are sold to an end-consumer in the actual quarter.

Detached houses:

The population is all detached houses completed during the quarter, and the observation unit is detached houses.

Data sources and sampling

Multi-dwellings:

Data is collected from construction companies and real estate developers. The sample should include the most important enterprises in the industry.

Detached houses:

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

Collection of data, editing and estimations

Multi-dwellings:

The information is collected electronically through the Altinn internet portal for public reporting. Some information is withdrawn from the real estate register of sales of dwellings. This contains mainly existing dwellings, but some new dwelling are also registered here.

Detached houses:

A questionnaire is distributed quarterly to all investors (final owners) of new detached houses. The respondent has a choice of answering an electronic or a form-based survey. The form-based survey is scanned optically.

No re-contact with the respondents.

Multi-dwellings and detached houses:

The data are automatically checked for extreme values.

The price indexes are calculated by hedonic method and by multivariable regression analysis. Price is the independent variable in the regression analysis and the independent variables are:

Multi-dwellings: the size of the dwelling, geographic zone, dwelling type, ownership and garage.

Detached houses: the size of the dwelling, geographic location, ventilation and heating systems and different types of self-built works.

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.

The total price index for new dwellings is an aggregate of the price index for new detached houses and the price index for new multi-dwellings.

The indexes are calculated as chained indexes with annual links. The base is changed in the 2nd quarter, with the previous year as a new base year.

Seasonal adjustment: Not relevant

Confidentiality: Single units can not be identified in the dissemination.

Comparability over time and space

Multi-dwellings:

The index series goes back to the 1st quarter of 2011 and the same calculation method is used in this period.

Detached houses:

There has not been any major changes in the statistics back in time.

Accuracy and reliability

Sources of error and uncertainty

Multi-dwellings:

Enterprises that have sales information on new dwellings can belong to different industries. There may be cooperation between enterprises and sometimes new enterprises are established because of a housing project. Since the dwellings sometimes lack a unique identification code early in the construction phase, duplicates may occur.

Enterprises may report erroneous data. Observations with unlikely extreme values are examined.

There will be a certain amount of non-responses in formbased surveys. In this survey the per cent of non-response is below 5, which is considered to have minimal impact of the results. Partial non-respons may also occur, and in most cases the enterprise then will be re-contacted.

The share of the total population that is covered by the sample, is estimated to vary between 22 and 36 per cent from 2011 to 2014. However, this estimate is uncertain because the exact number of transactions of new dwellings is unknown.

Detached houses:

Observations with unlikely extreme values are examined.

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 2014 was 0.7 months. 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.

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.

(Jensen 1999)

Revision: Not relevant

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Price index for new dwellings, Q4 2019

About the statistics

Definitions

Administrative information

Background

Production

Accuracy and reliability

Relevant documentation

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Price index for new dwellings, Q4 2019

Content

About the statistics

Definitions

Administrative information

Background

Production

Accuracy and reliability

Relevant documentation

Find more figures