Real House Price Index

Real House Price Index

The Real House Price Index is an economic indicator that measures actual changes in housing prices with the effects of inflation removed. With 2015 as the base year (100), it tracks how housing prices have subsequently evolved. A key characteristic is that it captures "genuine" price changes taking into account purchasing power, rather than nominal price increases.

There are several reasons why this indicator is important. First, housing is the largest asset for many households, and house prices are directly linked to individuals' asset accumulation. Second, the housing market is closely related to interest rate policy and economic growth, with real house price trends serving as a barometer of overall economic health. Furthermore, it serves as an important indicator for early warning of the formation and collapse of real estate bubbles. From a financial stability perspective, it is indispensable information for risk management at banks and financial institutions.

As a general trend, advanced countries tend to show a gradual upward trend over the long term, but this varies significantly by country. Notable points are that when the index rises rapidly, it suggests an overheating housing market, while conversely, when it declines, it reflects a market adjustment phase or economic difficulties. Policymakers and investors can make appropriate judgments by analyzing in detail the rate of change in this indicator and its relationship with other economic indicators.