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Information Note on Implications of COVID-19 on the Residential Property Price Index - May 2020

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The Residential Property Prices Index (RPPI) is designed to measure the change in the average level of prices paid by households for residential properties sold in Ireland at market prices. Calculation of the RPPI requires a sufficient number of transactions in the market to compile a reliable price index and estimate price change with accuracy. The restrictions on movement due to COVID-19 during May impacted negatively on the number of transactions in the housing market. This resulted in increased volatility in the RPPI estimates of price change for May. However, the volume of transactions remained sufficient to continue to compile the RPPI using regular procedures.

The number of transactions available for inclusion in the compilation of the provisional RPPI results for May was about 1,100, more than 9% fewer than in April and 45% fewer than in March. It is very similar to the average number of transactions per month in 2010 and 2011 (a period of significantly reduced activity in the housing market). It should be noted, however, that the number of transactions relevant for inclusion in the May estimates will grow in the coming months as more Stamp Duty returns are received by the Revenue Commissioners, in line with the deadline of 44 days allowed for filing returns. Preliminary RPPI results are updated in the following three months as new transaction data for the reference month becomes available. Therefore, the RPPI results for the latest three months are provisional.

The CSO continues to monitor the activity in the housing market. If transaction number continues to fall, the CSO may need to amend the procedures it uses to compile the RPPI. These may include, but are not limited to the following:

• imputation of the monthly price change for regional price indices where the reduction in the number of transactions has resulted in significant loss of reliability in the regional breakdowns,
• temporary suspension of the detailed regional price indices to allow for the continued production of the national RPPI.
• re-specification of the hedonic regression models used to compile the RPPI.

For further information on the data sources and methods used to compile the RPPI please refer to the RPPI Technical paper