Changes in home prices should be tracked via the Central Bureau of Statistic's quarterly survey - not those of the Justice Ministry's Chief Government Appraiser or the Finance Ministry, the head of the stats bureau said yesterday.
"The Chief Government Appraiser's index for housing prices is like [The Economist's] Big Mac index. Every once in a while economists try to create an index using a leading product, like a McDonald's hamburger," said Shlomo Yitzhaki. But the upshot is that there are too many indexes, and people lost sight of the forest for all the trees, as there are also a number of private and industry groups who also report on housing prices.
Yitzhaki, who serves as the official Government Statistician, said there is no complete database that includes full information on housing sales, including the details of the property, and covers all transactions. While the treasury, Government Appraiser and the bureau all rely on the same source of data from the Tax Authority, it only includes 85% of all the transactions in Israel and each government body uses different tools for analysis.
Yitzhaki explained that his bureau's index covers the entire country and all types of dwellings, and is based on actual sales transactions - which allows the bureau to answer how average prices have changed. The State Appraiser, for example, uses a sample of only certain sized apartments in a number of large cities in determining its index, and therefore does not accurately reflect changes in average or median prices, said Yitzhaki. The treasury's figures are based only on price and do not compare the types of housing involved, and when there is a change in the relative number of different types of dwelling sold, the treasury's index is not reliable, said Yitzhaki.
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