The war of words over house price trends in Israel has heated up with the Central Bureau of Statistics hitting back at the Real Estate Appraisers Association in Israel.
Earlier this month, the Central Bureau of Statistics published the Housing Price index for November and December 2016, which showed home prices falling 1.2%, the sharpest fall since 2007. At the start of this week, the Real Estate Appraisers Association in Israel entered the fray, publishing ostensibly contradictory figures for the prices of four room apartments in 16 selected major cities showing that prices had risen 1.7% in the fourth quarter of 2017.
The Real Estate Appraisers Association in Israel chairman Ohad Danos claimed that the Central Bureau of Statistics was misleading the public and that home prices were really still rising, claiming that the government's buyer fixed price deals, "distorted the housing prices published by the Central Bureau of Statistics."
"When buyer fixed price deals were excluded," the Appraisers Association claimed, "a 1% rise in comparison with the preceding quarter was demonstrated in the primary market. When they are not excluded, a 6% ostensible decline was shown in Rishon Lezion. While prices in the primary market are still rising, a faulty index including prices in the buyer fixed price plan will ostensibly show a dramatic fall in prices. This is probably the explanation for the index published by the Central Bureau of Statistics showing an alleged fall in prices in December 2016, which apparently included some of the buyer fixed price deals."
Last night, the chief statistician of the Central Bureau of Statistics Prof. Danny Pfeffermann hit back in a letter to Danos with copies to chairman of the Ministry of Finance Housing Committee Avigdor Yitzhaki, Ministry of Finance chief economist Yoel Naveh and others in the Ministry of Construction and Housing, Ministry of Justice and Bank of Israel.
Pfeffermann wrote, "Comparing findings requires the person conducting the comparison to have a deep understanding of the data being compared between sequential and corresponding periods. However, the comparison undertaken by the analysis, to my regret, misunderstands the data published by the Central Bureau of Statistics. It is superfluous to say that your publication has caused confusion and damage amongst the public."
Pfeffermann explains that in terms of quarterly comparisons the Central Bureau of Statistics data is similar to the the Real Estate Appraisers Association in Israel. However, the figures for the final two months of 2016 indicate a drop in prices and there is no point in comparing quarterly figures with monthly figures and such a comparison is fundamentally wrong or an attempt to undermine the credibility of the Central Bureau of Statistics.
Pfeffermann also addresses the claims by the appraisers that the Central Bureau of Statistics has skewered the Index with the buyers fixed price deals. "This claim is also simply mistaken. An empirical examination carried out by the Central Bureau of Statistics shows that the impact of the buyers fixed price deals on the Index was negligible due to the small number of deals conducted out of the total number of deals in the economy."
Danos said in response, "I'm happy that the chief statistician has confirmed the Real Estate Appraisers Association data regarding the 1.7% price rise in the fourth quarter. I think on this matter it would be appropriate for MK Folkman (Kulanu) to apologize for saying that I was promoting my own interests and calling our index 'fake news' and then today the Central Bureau of Statistics confirmed the data we reported. That said the chief statistician's letter shows that he is only familiar with our survey from the media."
He added, "If he had read the survey itself, he would have discovered that no comparison was made with the Central Bureau of Statistics Index, except mentioning that the provisional estimated fall in prices in December could possibly be due to buyers price deals only reported in December and this would have had a bigger impact than he claims in his letter."
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2017
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