The Hass Property Index Methodology
HassConsult has been a market leader in the Kenyan Real Estate sector for several years and decided to pass on this expertise to the public in the form of publishing trend in house prices. It has employed best statistical practice to ensure that the different mixture of properties sold in each quarter does not give a false impression of the actual change in house prices. The quarterly figure measures the mix adjusted average house price for middle and upper sections of the market only in Kenya for 3 types of home only (Houses, Apartments and Villas). The purpose of mix adjustment is to simply isolate pure prices changes.
The majority of house price information is derived using HassConsult Sold data as at transaction date, properties sold at true prices. This data is collated monthly at the signing stage and after the price agreed has been completed. Other sources in the public domain, and drawn from more than 20 estate agencies in Nairobi and the propertyleo database, are used to verify the HassConsult position, with a base of offer price data. This additional data source has allowed the development of the Composite Price series which is the Average Offer Price of all properties listed of the relevant property type in the 3 months prior to the end of the relevant quarter.
HassConsult price series utilize only residential property information. Properties that are not typical and may distort the series are also removed from the data set. The most significant exclusion is of properties where ‘development potential’ is factored into the pricing, being older properties with land of more than half an acre where zoning permits further development. The property index excludes properties where prices contain a development potential premium. However, this is not an issue with Lettings which include all property types.
The number of cases that are used to calculate the average price for a given quarter will depend on volume of quarterly transaction activity and out of these the cases that meet the criteria in the cleaning process. As the sample size varies from quarter to quarter limited assumptions are made in some series to continue trend analysis. HassConsult recognizes this fact and that is why the figures use market information to support sufficient sample size.
The Hass Property Index will be published quarterly and continually improved upon. The intention is to engage the public to disclose data to help build the sample size. Any data collected will still be subjected to the same criteria in the cleaning process but growing the sample will only improve the data set and subsequent trend analysis