Announcing the Findings of the Palestine Monetary Authority’s Residential Property Price Index – 4th Quarter 2020
Palestine Monetary Authority has for the first time issued the Residential Property Price Index in Palestine. The release of this indicator is part of Palestine Monetary Authority's vision and mission in maintaining monetary and financial stability in Palestine. The residential property price index measures the trend of changes over time in the prices of residential properties (apartments and houses) purchased by households.
The price of the advertised property is usually influenced by several factors and specifications, including the price of the property itself, including the price of the land on which the property is built, as well as the geographical location and residential neighborhood; the type of property (apartment or house); the nature of the property (new or used); the area of the property and the land area upon which the property is built in relation to the houses; the age of the property; the number of bedrooms and the number of bathrooms; services attached to the property such as availability of central heating; a parking lot; an elevator (in the case of apartments), etc.
In general, the residential property price index is of particular importance to decision makers, as well as those involved in the residential property market, both in terms of supply and demand, as it provides real-time information about these properties, in terms of their prices, characteristics and specifications. The information provided by this index can be used in many areas, the most important of which are:
- Monitoring residential property prices and monitoring the changes and risks involved and the factors affecting them and their implications for general price levels.
- Monitoring the development of the economic situation of the state (economic cycle).
- Predict some major economic variables such as growth and prices.
- Monitoring potential risks to financial stability.
- Helping regulatory authorities to formulate appropriate policies and procedures to maintain monetary and financial stability.
- Provide information to investors and real estate developers.
- Assessment of residential property prices for mortgage loan purposes by banks and lending institutions.
- Help regulatory authorities and real estate assessors to assess residential property prices more accurately.
- Provide information about the residential property market to government institutions concerned with economics and planning.
- Economic studies and research.
The findings indicate that the total residential property price index in Palestine reached 106.1 points in the fourth quarter of 2020, up by 1.1% compared to fourth quarter of 2019. The total index is an aggregate index of two sub-indices: the first is a residential apartment index, and the second is for houses, including villas.
At the level of apartments, the index’s value registered 97.4 points in the fourth quarter of 2020, a growth rate of 0.7% compared to the corresponding quarter of 2019. For houses, the findings show that the index's value for the fourth quarter was 112.0 points, with a growth rate of 1.4%.
At the 2020 level as a whole, the value of the index in Palestine was about 104.1 points, a growth rate of 2.5% compared to 2019, with the value of the apartment price index at 96.7 points, a decrease of 1.2% compared to 2019, while house prices grew by about 6.3% to reach 110.7 points in 2020.
 For more details on the methodology and mechanism of preparing the index, please see the paper particularly prepared for this purpose: PMA (2021). Residential Property Price Index for Palestine.