FAQs
Why look at a House Price Index instead of a median or an average?
Data on median and average house prices is open to being skewed by market composition changes. This means observed changes in these values could be almost entirely due to the changed nature in the underlying sample (e.g., an unusually large representation of high-end housing sales) rather than changes in the true market value.
What is the REINZ House Price Index (HPI)?
The REINZ House Price Index (HPI) measures how residential property values change over time by comparing sale prices relative to underlying property values. It is designed to sit alongside median prices, helping to identify underlying price trends rather than changes driven by the mix of homes sold.
How is the HPI different from median or average prices?
Median prices show the typical dollar value of homes sold and are easy to relate to. The HPI focuses on how values are changing over time by comparing prices relative to property values. Used together, the HPI and median price provide a more complete view of market conditions.
Why does REINZ use an index as well as median prices?
Median prices show what homes are selling for in dollar terms, while an index highlights changes in values over time. REINZ uses both measures because they answer different questions, helping users understand current price levels as well as underlying market trends.
Why is the HPI based on the unconditional sale date rather than the settlement date?
The unconditional sale date is when the sale price is confirmed and the contract becomes binding. Using this date allows the HPI to reflect market conditions closer to when buyer and seller expectations are set, rather than settlement, which can occur weeks or months later.
Can I compare HPI values directly between different regions or TAs?
HPI movements can be compared across regions or TAs to understand relative trends, but index levels are not dollar values. Comparisons are most meaningful when focusing on the direction and rate of change rather than the absolute index level.
In REINZ reporting, councils and Territorial Authorities (TAs) refer to the same geographic areas and are used interchangeably.
How current is the HPI and how often is it updated?
The HPI is updated and published on a monthly cycle, using the most recent unconditional sales data available for each reporting period. This provides a timely view of changes in housing values while supporting stable trend analysis.
When should I use a multi-month HPI instead of a single-month view?
A single-month HPI provides the most timely view of market conditions but can be volatile. Multi-month views, such as 3 or 6 months ending, are better suited for understanding underlying trends and are often more reliable for smaller areas or segmented analysis.
What does HPI aggregation mean (1-month, 3-month, 6-month)?
Aggregation refers to calculating the HPI using sales from one month or by combining sales across multiple months. Using more months reduces short-term volatility and helps smooth trends, particularly in smaller markets or value segments with fewer sales.
Popular calculation aggregations for the HPI are "3 Months Ending" (e.g. June 2024 - August 2024) and "6 Months Ending" (e.g. March 2024 - August 2024)
What does the High–Medium–Low (HML) breakdown show?
The High–Medium–Low (HML) breakdown shows how price movements differ across high, mid, and low value properties within a market. By analysing these segments separately, it helps identify whether changes in housing values are broad-based or concentrated in particular parts of the market.
Why can price movements differ between High, Medium and Low properties?
Different parts of the market can respond differently to factors such as interest rates, affordability, and buyer confidence. As a result, price movements may be stronger or weaker in certain value segments, even within the same area and time period.
Does “High”, “Medium” or “Low” refer to fixed price bands?
No. High, Medium and Low are relative groupings within each area and time period, based on property values. This means the thresholds can differ between regions and over time, and are not fixed dollar price bands.
Why can the HPI move differently from the median price in the same period?
The HPI and median price measure different aspects of the market. Median prices can be influenced by the mix of properties sold, while the HPI focuses on value movements over time. As a result, the two measures can move differently in the same period.
What does a percentage movement in the HPI mean?
A percentage movement shows the rate at which housing values have changed over a specific period. It highlights how quickly market conditions are shifting and can help identify momentum or turning points in price trends.
How should I interpret changes in the HPI level?
Changes in the HPI level show how residential property values are moving over time within a market. An upward movement indicates rising values, while a downward movement indicates falling values. The size and persistence of the movement provide insight into the strength and direction of market trends.
What types of property sales are included in the HPI?
The HPI includes residential property sales recorded through REINZ member activity that have reached unconditional status. Sales are subject to standard data validation processes to ensure consistency and reliability in measuring housing value trends.