The Australian Bureau of Statistics is preparing to outsource its residential property price index, buying in data from a private provider.
Deputy Statistician Ian Ewing told a Senate hearing on Wednesday the bureau had considered abandoning e its property price index altogether, given the existence of "other house price indexes in the market that may be potential alternatives".
Its main competitors are RP Data, owned by the US data provider CoreLogic and Australian Property Monitors, owned by Fairfax Media, the publisher of Business Day.
RP Data boasts a "hedonic" rather than average price index, meaning that it moves only as the prices of houses with similar characteristics move. An average price index can climb strongly in the months when expensive properties change hands and weakly in the months when low-priced properties sell, even though underlying values have changed.
The ABS measure is an average, but uses stratification and weighting in an attempt to mimic some of the properties of a hedonic index. Both the ABS and the RP Data indices produce similar results. In the year to June the ABS had Sydney house prices climbing 15.6 per cent and RP Data had them climbing 15.4 per cent. Melbourne prices climbed 9.3 per cent and 9.4 per cent.
The Reserve Bank quotes RP Data rather than Bureau of Statistics house price measures in reports, in part because they are published monthly rather than quarterly and published sooner.
Mr Ewing said the ABS had decided not to abandon the index altogether because it needed house price data to feed into other statistics, including the Australian national accounts.
"We have undertaken a review which looks like it has found a suitable alternative. We are now in the process of looking into securing access to that data and then evaluating whether or not it is suitable," he told the Senate.
"It will come at a cost but potentially it will come at a lower cost than before, so we will be able to produce data of sufficient quality but potentially at a lower price."
The bureau's acting head Jonathan Palmer said the future of its flagship labour force survey would become clearer within weeks. He hoped to have a report from an outside panel set up to examine erratic behaviour in the August and September figures before the release of the October figures on November 6.
Although he dismissed the notion that budgetary constraints were behind the wild swings in the reported figures, the head of the labour and social statistics group Peter Harper said that identified cost was one of the reasons the bureau didn't run two sets of collections in parallel when it changed over to cheaper collection methods earlier this year. He said 12 months of parallel surveys would have cost $13 million.
The bureau's head Brian Pink retired in January when his seven-year contract expired. Asked why he had not been replaced, Finance Minister Mathias Cormann said the government was still looking for "the best possible person to replace him".
