Abstract
In addition to the progress made by official statistics in monitoring the evolutions in the housing markets, interest increased in commercial property price indicators (CPPIs). Interested parties are public institutions, policy makers, analysts, and market investors. However, more so than residential property prices indices, limited information is available on price changes of commercial buildings. Compared to house prices statistics, for commercial buildings additional problems typically arise such as a relatively small number of transactions and a greater variety of types of structures. Against this background and in the context of the G20 Data Gaps Initiative, Eurostat took the lead in coordinating the drafting of a statistical report called ‘Commercial property price indicators: sources, methods and issues’. The report has been published on the Eurostat website in December 2017.1The primary aim is to outline concepts, methods, data sources and key issues so as to better inform both compilers and users. The report makes a first attempt at setting out the wide range of challenges linked to the measurement of developments in commercial property markets. It provides a basis for further work in this new area of statistics.Work on developing CPPIs needs to take into account that heterogeneity among commercial properties exists not only at the individual asset level, but also at an aggregate level in populations of properties that are effectively traded in distinct asset market segments. To construct useful CPPIs it is crucial to recognise this type of aggregate level heterogeneity and market segmentation, because different price dynamics can prevail across different market segments. The statistical report published by Eurostat reviews different methods for compiling CPPIs. However, the fact that commercial property is much more heterogeneous and there are usually significantly fewer transactions can limit the practical choices of index construction methodology.Furthermore, access to relevant and good quality data is crucial for CPPIs compilation. In practice, the choice of methodologies are constrained by the lack of data, especially on transaction prices. The statistical report reviews also the advantages and disadvantages of different sources of information.1. see link:http://ec.europa.eu/eurostat/web/products-statistical-reports/-/KS-FT-16-001?inheritRedirect=true&redirect=%2Feurostat%2Fpublications%2Fstatistical-reports
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