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URA changes way in which Property Price Index is calculated

SINGAPORE — The Urban Redevelopment Authority (URA) is using a new method to compute its Property Price Index (PPI), an index which tracks the prices of private homes.

SINGAPORE — The Urban Redevelopment Authority (URA) is using a new method to compute its Property Price Index (PPI), an index which tracks the prices of private homes.

Starting with transactions in the first quarter of this year, more attributes of the properties will be included to better compute price changes, such as the size and age of the unit and its proximity to MRT stations, the URA said. These will be added to the attributes already used, such as tenure, property type and general location.

The method of aggregating price changes will also be improved. The URA will use a so-called ‘stratified hedonic regression method’, which is able to take into account differences in housing characteristics and better reflect changes over time. It will use five-quarter fixed weights, which factor in the total value of transactions, and these be updated every three years to reflect the prevailing market structure.

The new methodology has been introduced due to more types of housing being launched, such as shoebox units, as well as a wider range of housing quality. The old index did not fully differentiate between a large apartment or a shoebox unit, or between new and old homes.

The URA said that six types of price indices will be published. They are:

- PPI of Residential Properties

- PPI of Landed Residential Properties

- PPI of Non-Landed Residential Properties

- PPI of Non-Landed Residential Properties in Core Central Region

- PPI of Non-Landed Residential Properties in Rest of Central Region

- PPI of Non-Landed Residential Properties in Outside Central Region

 

CORRECTION: An earlier version of this article said five types of price indices will be published. This is incorrect. Six types of prices indices will be published. We are sorry for the error.

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