Working towards comparable measures of commercial real estate developments
Conference
64th ISI World Statistics Congress
Format: IPS Abstract
Session: IPS 244 - Commercial real estate indicators: progress and challenges
Tuesday 18 July 4 p.m. - 5:25 p.m. (Canada/Eastern)
Abstract
Due to links between commercial real estate (CRE) markets, the economy and the financial system, unsustainable developments in CRE markets may have serious implications for the stability of the financial system. There is a need for more data on the CRE market, which would allow for its effective monitoring and early identification of risks to financial stability.
In Europe, important data users are the European Systemic Risk Board (ESRB) and the European Central Bank (ECB). In October 2016, the ESRB issued a recommendation on closing real estate data gaps, which was subsequently amended in 2019. The recommendation specifically addresses the existing data gaps in the availability and comparability of data on CRE. In particular, it indicates the need for harmonised price, rent and rental yield indices compiled with quarterly frequency and with the breakdowns into different property types and into prime and non-prime locations.
This paper describes the progress made by European countries in developing the CRE indicators. Moreover, it will discuss the main methodological and technical issues faced by data producers. The features of CRE markets and the available data sources, combined with the granularity of information expected by data users, make developing indicators that accurately and timely capture developments in these markets challenging.