House price index
1. Contact
Responsible agency
Unit
Contact person
Position
Email (agency)
Phone
2. Statistical presentation
Data description
The House Price Index reflects changes in dwelling prices in a specified period of time.
Statistical concepts and definitions
Statistical unit
Each published index or rate of change refers to the expenditure by the household sector for acquiring residential property in Latvia.
Statistical population
Population Coverage
The HPI covers all transactions in which household(-s) is (are) indicated as a buyer, regardless of the legal status of the seller(-s). The HPI includes also dwelling purchases made by households – non-residents within the economic area of Latvia.
The HPI excludes transactions between legal entities, municipalities and government, as well as deals engaging legal entity as a buyer and household as a seller. The index does not include commercial areas, outhouses, saunas, garages, cellars, gazebos and other structures unfit for human occupancy.
3. Institutional mandate
Legal acts and other agreements
- Regulation (EU) 2016/792 of the European Parliament and of the Council of 11 May 2016 on harmonised indices of consumer prices and the house price index.
- Commission Implementing Regulation (EU) 2023/1470 of 17 July 2023 laying down the methodological and technical specifications in accordance with Regulation (EU) 2016/792 of the European Parliament and of the Council as regards the house price index and the owner-occupied housing price index.
4. Accessibility and clarity
On-line database
5. Comparability
Comparability - geographical
HPI is considered to be high in the EU countries. To ensure that HPI are comparable among member states, methods, concepts, definitions and classifications are provided by the law.
Data of the EU countries in Eurostat database.
Length of comparable time series
Since 2006.
6. Coherence
Coherence- cross domain
N/A
7. Statistical processing
Source data
The main data source used to obtain the information is the State Unified Computerised Land Register. The index is calculated based on the transaction prices registered in the Land Register by households during the comparison period, whereas weights reflect structure of the dwelling purchases during the previous calendar year.
The weights are revised every year and recalculated into the prices of the 4th quarter of the previous year.
Data collection
N/A
Data compilation
HPI is a Laspeyres-type quality-adjusted price index.
For the index calculation all transactions are stratified into the following groups (strata):
- new flats;
- new single-dwelling houses (until 2008, including);
- existing flats in Riga;
- existing flats in the rest of the country;
- existing single-dwelling houses.
The group index is calculated as the ratio of geometric means of transaction prices in comparison period and reference period.
In order to adjust structural (qualitative) dwelling transaction differences between the comparison and reference periods, a hedonic regression method is used within each group. By the method based on the most significant price determinants, a hypothetical value of dwelling is calculated as follows:
, where
– a natural logarithm of transaction price;
– the price factors;
– the regression coefficients (factor impacts);
– the constant.
The factors having the greatest impact on the dwelling price and taken into account in the HPI calculations are geographical location of the property, property size (area) and availability of amenities.
For the calculation of higher level price indices and the overall HPI a Laspeyres-type formula that expresses the weighted arithmetic mean value of the lower level price indices is used:
, where
– the overall HPI in the period T, compared to the period 0 (reference period);
– the share of the transaction price in stratum J in a reference period;
– the price index in stratum J in a period T, compared to the period 0 (base period).