• Description

• Objectives

• Definition

• Data Source

• How to make use of Real Estate Price Index results?

• Publishing
   

Description:

GAStat provides the Real Estate Price Index data through the MOJ to construct the real estate price index and to track changes taking place in the real estate prices. Given the paramount significance of such data, an integrated system was developed to fulfill all requirements necessary for collecting and auditing data, along with calculating the index.

Objectives:

• Developing sophisticated real estate statistical indicators that measure the performance of the real estate market in KSA;
• Bridging the gap in real estate data; and
• Satisfying international, regional and domestic requirements in this regard.

Definition:

Real Estate Price Index is "a statistical tool for measuring the relative change in real estate prices between two points in time."

Data Source:

The data required for calculating the real estate index are provided by the MOJ as the only official reference and source of the data related to the real estate sector in KSA. 

Data Nature:

• The MOJ provides GAStat with the detailed data of the cities which represent all administrative regions as per a number of variables achieving purposes of the calculation of agricultural, commercial and residential real estate index numbers.
• Having obtained primary data of the real estate transactions for the years 2012-2015, GAStat studied those data through its team of specialists to evaluate them, and verify their adequacy for constructing the real estate index. Accordingly, the following items are determined:

o The appropriate base year;
o The level of coverage/ representation;
o Classification;
o Calculation of weights (relative importance).

Coverage: 

The real estate index covers all administrative regions of KSA.

Base Year:

The base year is determined to be 2014. 

Classification:

The MOJ data are classified into three main sectors: 
a) Residential Sector: It includes residential plots, residential buildings, villas, apartments and houses. 
b) Commercial Sector: It covers commercial plots, commercial buildings, galleries/shops, and malls. 
c) Agricultural Sector: It is made up of the  agrarian lands.

Weights (Relative Importance):

Weights are calculated based on the value of real estate transactions of each sector comprising the index in the course of the base year.

Relative Importance by Sector all over KSA

Reviewing and Verifying Data: 

Data are reviewed and verified through the following methodology:

• Making sure that data and prices are logical and inclusive;
• Setting automatic verification rules to be followed during data-entry, auditing, processing and publishing;
• Applying procedures that address the problem of disappearance of prices of some real estate types.

Calculation of Real Estate Price Index:

• Laspeyres equation is used to calculate the real estate index: 

How to make use of Real Estate Price Index results?

Real Estate Price Index data are used in many fields, including:

• Monitoring price movements of real estate assets;
• Assisting the relevant authorities in taking sound economic decisions;
• Measuring changes in real estate prices from time to time; and
• Using the Real Estate Price Index data to make the economic and statistical analysis of real estate price movements, and come up with predictions about real estate trends in the future.
• It is used as a main economic indicator to predict the economic growth.

Publishing: 

Real Estate Price Index data are published as follows: 

• Results of the Real Estate Price Index are published as per specific dates declared at the GAStat website.
• The GAStat website www.stats.gov.sa is regarded as the accredited official publishing platform.
• Results of the Real Estate Price Index are published by contacting media, and through social networks. 
• The reports are submitted to the relevant authorities.