HOME REFINANCE Index
Information in this section to describe the project
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The PEXA Mortgage Residential Index Series, developed by RoZetta Technology, provides a reliable and consistent benchmark to understand the weekly movement on the activity and volume of the Australian residential mortgage refinance market.
Two main approaches have been implemented to calculate the indices:
1. A central tendency approach, and;
2. A geographical stratification approach (only for volume indices).
The first approach is computationally less intensive to calculate, as it only requires the basic average/median settlement amounts and the number of settlements occurred in particular region. Due to its simplicity, it is a popular approach for index generation and is widely used. However, central tendency indices can be biased by more or less active sub-markets in the region (e.g. high income suburbs vs low income suburbs). Therefore, the second proposed approach aims to stratifying all the transactions by geography in order to ensure a more homogeneous cluster of observations ("stratum") and mitigate fluctuations in the index caused by compositional shifts in the sample over time. Given that we generate the indices with both approaches, is the users’ choice to decide which one is more adequate for their analysis. For the implementation of these approaches, we have adhered to the best practices specified by the Statistical Office of the European Union (Eurostat) in the Residential Property Price Indices Handbook , and have adapted it to generate indices for the mortgage refinance market. These include different methods to remove seasonal effects and index smoothing techniques to control the volatility reflected.
PEXA mortgage refinance indices can be calculated at multiple geographical regions within Australia defined by the Australian Statistical Geography Standard (ASGS) . In this work we calculate indices at:
- National level: Includes all the states in which PEXA operates
- State level: A separate index for each state.
- SA4 level: A separate index for each SA4 region.
More detailed information regarding the methodology can be found in the documentation.
 Eurostat. Handbook on residential property price indices (rppis).Eurostat Methodolo-gies & Working Papers, 2013.
 Australian bureau of statistics, “Australian statistical geography standard (asgs)” [on-line].https://www.abs.gov.au/websitedbs/d3310114.nsf/home/australian+statistical+geography+standard+(asgs). Accessed: 2020-08-07.