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, and amending Commission Regulation (EU) 2020/1148 (Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to 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, and repealing Council Regulation (EC) No 2494/95 (1), and in particular Articles 3(9), 3(10), 4(4), 7(6) and 9(4) thereof,

Whereas:

(1) Regulation (EU) 2016/792 lays down a common framework for the production of the harmonised index of consumer prices (HICP), the harmonised index of consumer prices at constant tax rates (HICP-CT), the owner-occupied housing (OOH) price index and the house price index (HPI).

(2) Pursuant to Article 3(9) of Regulation (EU) 2016/792, the Commission is to adopt implementing acts specifying the breakdowns of the HPI and the OOH price index.

(3) Pursuant to Article 3(10) of Regulation (EU) 2016/792, Member States are to update annually sub-index weights for the HPI and the OOH price index. Therefore, it is necessary to specify uniform conditions for the quality of weights of the harmonised indices.

(4) In accordance with Article 3(2) of Regulation (EU) 2016/792, the HPI and the OOH price index are to be annually chain-linked Laspeyres-type indices. Therefore, pursuant to Article 4(4)(iv) of Regulation (EU) 2016/792, the Commission should further specify methods for the compilation of sub-indices and elementary price indices.

(5) Price indices related to purchases of dwellings should be representative of all relevant transactions. Therefore, pursuant to Article 4(4)(i) of Regulation (EU) 2016/792, the Commission should further specify rules for the representativity of the data sources used.

(6) Price indices related to purchases of dwellings should not be affected by quality differences between transacted dwellings. Therefore, pursuant to Article 4(4)(ii) and (iv) of Regulation (EU) 2016/792, the Commission should further specify rules for data collection and index compilation.

(7) In accordance with Article 2(10) of Regulation (EU) 2016/792, the HPI measures changes in transaction prices of dwellings purchased by households. Therefore, pursuant to Article 4(4)(ii) of Regulation (EU) 2016/792, the Commission should further specify rules on treatment of prices used in the calculation of the HPI.

(8) The OOH price index aims at improving the relevance and comparability of the HICP. Therefore, for the compilation of the OOH price index, it is necessary to specify a methodological framework that is consistent with a methodological framework for the compilation of the HICP.

(9) In its report on the suitability of the OOH price index for integration into the HICP coverage (2), the Commission assessed that the OOH price index is currently not suitable for integration into the coverage of the HICP. In accordance with Article 3(7) of Regulation (EU) 2016/792 and in close cooperation with the European Central Bank and the Member States, the Commission should pursue the methodological work required for the integration of the OOH price index into the HICP coverage.

(10) Since it is not possible to observe all transactions of the target universe of the OOH price index, the Commission, pursuant to Article 4(4)(i) of Regulation (EU) 2016/792, should further specify rules for sampling.

(11) In accordance with Article 2(9) of Regulation (EU) 2016/792, the OOH price index measures changes in the transaction prices of dwellings new to the household sector and of other products that the households acquire in their role as owner-occupiers. Therefore, pursuant to Article 4(4)(ii) of Regulation (EU) 2016/792, the Commission should further specify rules for the treatment of prices used in the calculation of the OOH price index.

(12) The OOH price index should provide a measure of pure change in prices that is unaffected by quality change. Therefore, pursuant to Article 4(4)(iii) of Regulation (EU) 2016/792, the Commission should further specify rules for replacements and quality adjustments that should be applied in relation to products other than dwellings.

(13) In accordance with Article 7(5) of Regulation (EU) 2016/792, the HPI, the OOH price index and their sub-indices that have already been published may be revised. Therefore, pursuant to Article 7(6) of Regulation (EU) 2016/792, the Commission should specify the uniform conditions for the revision of the HPI, the OOH price index and their sub-indices.

(14) In accordance with Article 9(2) of Regulation (EU) 2016/792, Member States are to provide Eurostat with standard quality reports and inventories. Therefore, pursuant to Article 9(4) of Regulation (EU) 2016/792, the Commission should establish the deadline for providing these reports and inventories.

(15) Pursuant to Article 7(4) of Regulation (EU) 2016/792, Member States should provide data and metadata to the Commission (Eurostat) in accordance with specified exchange standards and procedures. Therefore, pursuant to Article 7(6) of Regulation (EU) 2016/792, the Commission should specify the data and metadata exchange standards.

(16) Commission Regulation (EU) 2020/1148 (3) should therefore be amended.

(17) It is appropriate to set a transitional period to take into account the specific situation of competent authorities in the Member States that need to make the necessary arrangements to ensure compliance with this Regulation.

(18) The measures provided for in this Regulation are in accordance with the opinion of the European Statistical System Committee established by Article 7 of Regulation (EC) No 223/2009 of the European Parliament and of the Council (4),

HAS ADOPTED THIS REGULATION:

CHAPTER 1

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation establishes uniform conditions for producing the following indexes:

(a) the house price index (HPI);

(b) the owner-occupied housing (OOH) price index.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘dwelling’ means a self-contained immovable residential unit, either part of a block of flats or built on its own plot of land, which is appropriate for occupation by one household and can provide housing services;

(2) ‘housing cooperative’ means a legal entity that grants each of their shareholders the right to occupy a certain dwelling in the cooperative;

(3) ‘transacted dwelling’ means a dwelling the legal ownership of which was transferred as a result of a sales transaction including the purchase of shares in a housing cooperative that gives the right to occupy a dwelling in the cooperative;

(4) ‘newly built dwelling’ means a transacted dwelling that is newly constructed or is created by converting an existing non-residential building or a non-residential part of an existing residential building;

(5) ‘existing dwelling’ means a transacted dwelling that comes from the existing stock of dwellings;

(6) ‘sub-index’ means the price index for any of the expenditure categories set out in Articles 3 and 11 of this Regulation;

(7) ‘elementary aggregate’ means the smallest aggregate used in a Laspeyres-type index;

(8) ‘market price’ means the amount of money that a willing buyer pays to acquire a good, service or asset from a willing seller where the exchanges are made between independent parties based on commercial considerations only;

(10) ‘HPI expenditure share’ means a percentage of total household expenditure on purchases of dwellings belonging to the target universe of the HPI;

(11) ‘stratum’ means a subgroup of elements belonging to the target universe of HPI or OOH price index within an elementary aggregate, for which a price index adjusted for any quality differences is calculated and to which a weight is assigned;

(12) ‘quality difference between transacted dwellings’ means a difference between the type, physical characteristics, age or location of transacted dwellings in two periods, where it is relevant from the purchaser’s perspective;

(13) ‘type of dwelling’ means a category of dwellings having common characteristics. Two main types of dwelling are flats and houses. Depending on country circumstances, further types may be distinguished, such as detached houses, semi-detached houses and terraced houses;

(14) ‘transaction price’ means the total price paid by a household for the acquisition of a dwelling, including value added type taxes and excluding subsidies influencing the final prices of dwellings, and covering the price of both the structure and the underlying land where relevant;

(15) ‘value added type tax’ means a tax on goods or services collected in stages by enterprises and which is ultimately charged in full to the final purchaser, as defined in paragraph 4.17 of Chapter 4 of Annex A to Regulation (EU) No 549/2013 of the European Parliament and of the Council (5);

(16) ‘hedonic index’ means a price index that uses a hedonic regression as a tool for its compilation. A hedonic regression refers to the statistical analysis of a functional form used to estimate the impact of price-determining characteristics on the price of a dwelling;

(17) ‘stratified median or mean index’ means a price index that is constructed on the basis of a measure of central tendency, which is calculated for each stratum of transacted dwellings belonging to the target universe of the HPI among which there are no significant quality differences;

(18) ‘method that replicates the matched model approach’ means a method to compile a price index that compares transaction prices from repeated sales of the same dwellings or compares actual transaction prices with appraisals to compute price relatives for the same dwellings;

(19) ‘owner-occupiers’ means households that live in a dwelling that they own;

(20) ‘new dwelling’ means a dwelling that, when ready to be used, is considered to provide a new housing service and is seen as an addition to the existing stock of dwellings;

(21) ‘prefabricated house’ means a house that is manufactured off-site and is ready to assemble;

(22) ‘self-build dwelling’ means a dwelling built by a household for its own occupation, either through its own labour or by employing a professional builder or by buying a prefabricated house and where land is acquired separately from the building;

(23) ‘major renovations’ means improvements that increase a dwelling’s underlying standard of providing accommodation services, or substantially lengthen its previously expected service life and therefore increase its value, and go beyond activities required to keep the dwelling functioning and usable;

(24) ‘major repairs and maintenance’ means works typically undertaken by the dwelling owner in order to bring the dwelling back to its original state or the state after the last major renovation which helps to extend its life but not to increase its value compared with its original state or its state after the last major renovation;

(25) ‘insurance connected with dwellings’ means a non-life insurance, taken out by a dwelling owner, against fire, storm, flood, theft and vandalism typically covering the building structure and immovable parts such as fitted kitchens, fitted wardrobes;

(26) ‘target universe of the OOH price index’ means all transactions included in owner-occupiers’ housing expenditure, as defined in the Annex;

(27) ‘OOH expenditure share’ means a percentage of total household expenditure on transactions belonging to the target universe of the OOH price index;

(28) ‘producer price index for construction’ means an index that shows the development of prices paid by the client to the construction company, as defined in Annex IV to Commission Implementing Regulation (EU) 2020/1197 (6);

(29) ‘product-offer’ means a product specified by its characteristics, the timing and place of purchase and the terms of supply, and for which a price is observed;

(30) ‘homogeneous product’ means a set of product-offers among which there are no significant quality differences and for which an average price is calculated;

(31) ‘individual product’ means a product-offer or a homogeneous product;

(32) ‘observed price’ means the price of an individual product, used by the Member State for the compilation of certain sub-indices of the OOH price index;

(33) ‘target sample for the OOH price index’ means a set of transacted dwellings and individual products that pertain to transactions from the target universe of the OOH price index and for which price data are to be used for OOH price index compilation;

(34) ‘replacement product’ means an individual product that replaces another individual product in the target sample for the OOH price index;

(35) ‘estimated price’ means a price based on an appropriate estimation procedure;

(36) ‘actual premiums’ means the amounts paid for a specific insurance policy to obtain insurance cover over a stated time period;

(37) ‘inducement’ means a change, often temporary, in the characteristics of an individual product by increasing the quantity of the product, attaching another individual product free of charge or offering other benefits to the consumer;

(38) ‘quality difference’ means a difference between the characteristics, timing, place of purchase or terms of supply of two individual products, where this is relevant from the consumer’s perspective;

(39) ‘elementary price index’ means an index for an elementary aggregate or an index for a stratum within an elementary aggregate;

(40) ‘transitivity’ means the property whereby an index that compares periods (a) and (b) indirectly through period (c) is identical to one that compares periods (a) and (b) directly;

(41) ‘time reversibility’ means the property whereby the index between two periods (a) and (b) is equal to the inverse of that same index between two periods (b) and (a);

(42) ‘revision’ means a change in price indices or weights published by the Commission (Eurostat);

(43) ‘provisional data’ means price indices and weights that a Member State is expected to finalise in a subsequent quarter;

(44) ‘implicit service charge’ means the output of insurance companies, as defined in paragraph 16.51 of Annex A to Regulation (EU) No 549/2013.

CHAPTER 2

HOUSE PRICE INDEX

Article 3

Breakdown of the house price index

The HPI shall cover the following expenditure categories:

(a) H.1. Purchases of dwellings;

(b) H.1.1. Purchases of newly built dwellings;

(c) H.1.2. Purchases of existing dwellings.

Article 4

Weights reflecting the structure of expenditure on purchases of dwellings

(a) data sources providing information on household expenditure on transacted dwellings that belong to the target universe of the HPI in year t-1 or year t-2 shall be used to obtain sub-index HPI expenditure shares and divide them among the elementary aggregates of the sub-index;

(b) the HPI expenditure shares based on data from the year t-2 shall be reviewed and updated to make them representative of the year t-1;

(c) the HPI expenditure shares for the elementary aggregates shall be adjusted with an appropriate price change between the year t-1 and the fourth quarter of the year t-1.

Article 5

Weights reflecting the level of expenditure on purchases of dwellings

Member States shall derive sub-index and total HPI weights reflecting the level of expenditure on purchases of dwellings in the year t-1.

Article 6

Collection of prices and price-determining characteristics

Article 7

Representativity

Article 8

Treatment of prices

Article 9

Index compilation