Frequently Asked Question (FAQ): What is the House Price Index?
The HPI measures the rate of change in the prices of the stock of established houses, including the land component, in the 8 capital cities. The national HPI is a weighted average of the indexes for the 8 capital cities. The scope for the HPI is restricted to those dwellings where the primary purpose is residential (i.e. excluding commercial properties) regardless of ownership or tenure of the occupants (i.e. including government-owned properties and properties owned by private landlords). As the name indicates, the HPI is presented as a price index. Price indexes allow the comparison of two sets of prices for a common item or group of items. An index number on its own has little meaning. The value of a price index stems from the fact that index numbers for any two periods can be used to directly calculate price change between those periods. For example, the HPI Sydney index number of 93.5 in December quarter 2005 says nothing more than Sydney house prices have fallen on average by 6.5
