Page 447 - Invited Paper Session (IPS) - Volume 1

IPS176 Thomas A. K.

Progress in the measurement of German
1
commercial property prices
Thomas A. Knetsch
Deutsche Bundesbank, Directorate General Statistics

Abstract
The compilation of commercial property price indices is a big challenge. In
Germany, substantive data gaps prevent the national statistical authority from
calculating and publishing official figures. By contrast, policymakers urge for
timely, reliable and comprehensive data, thereby making proposals how to
aggregate and classify individual price information in order to best serve the
intended policy uses. Experimental price indices according to various
definitions of commercial real estate are constructed on the basis of two
ingredients: the appraisals for transaction prices of houses, apartments, multi-
family dwellings, office and retail buildings in 127 German towns and cities
provided by bulwiengesa, a real estate consulting company, and
corresponding data on floor spaces which make it possible to derive coherent
weighting schemes. The overall price trends revealed by the various indices
are rather similar while differences in detail can be explained by their specific
compositions. Analysts may find the price indices helpful to better understand
trends on German commercial real estate markets. Statisticians may acquire
from this exercise further knowledge about measurement practices, as official
statistics are encouraged to take steps in direction to establishing a thorough
reporting on commercial real estate markets.

Keywords
Commercial property price indices; measurement; private data sources; stock
weighting; Germany

1. Introduction
The demand for commercial property price statistics has increased in the
aftermath of the global financial crisis as both policymakers and academic
scholars urge for timely, reliable and comprehensive data to study economic,
macroprudential and supervisory issues related to this segment of the real
estate market. However, as stated by Diewert and Shimizu (2015), for instance,

1 Address: Wilhelm-Epstein-Str. 14, 60431 Frankfurt am Main, Germany,
thomas.knetsch@bundesbank.de The author thanks Julian Barnikol, Alexandra Päckert, Mario
Schimmelpfennig and Patrick Schwind for excellent research assistance. The paper also
benefitted from discussions with Christine Schlitzer. Of course, all remaining errors are mine.
The views expressed in this paper are solely mine and should not be interpreted as reflecting
the views of the Deutsche Bundesbank.
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