SberIndex develops new property price indices

Jul 05, 2021

SberIndex will be publishing primary and secondary real estate price indices based on a new methodology on a regular basis. The advantage of the new method is that it excludes the effect of inadvertent changes on supply patterns, which is particularly important when monitoring changes on the new constructions market and regional markets. The new indices are based on data from actual purchase and sale agreements with Sber mortgages. SberIndex will continue to concurrently publish price indices calculated according to supply, i.e., to prices indicated in DomClick ads.

Data from Sber mortgage agreement purchase prices are used to calculate real estate prices. When the price is lowered in a purchase and sale agreement, the actual property price is valued at the sum of the mortgage loan and the down payment.

The major change in the methodology is that all real estate is divided into eight segments according to housing class. Each class has its own subindex, which is included in the aggregate result with a weight equal to the proportion of this property class in regional sales since 2015. This excludes the effect of variations in supply patterns, which is of particular importance for the new constructions market in Russia’s regions. The new methodology was partially used by SberIndex analysts for the Soft Mortgage: Results and Prospects study.

Precise tools are important for analyzing the housing market. Current methods use various approaches and levels of data representation, which often leads to misrepresentation of price dynamics as a result of changes in supply patterns. Price indices are very dependent on the behavior patterns of sellers and reflect prices for housing that may differ in quality.

SberIndex’s new property price index reflects long-term trends in market structure grouped by real estate classes. Another significant advantage of the methodology is the ability to construct a highly detailed index not only by region or metropolis, but also in relation to small settlements, including district centers.

Mikhail Matovnikov

Senior Managing Director and Chief Analyst, Sberbank