The Unassuming Economist

From the IMF’s latest report on Georgia:

“The compilation of an RPPI will facilitate the assessment of developments and risks in property markets. It will therefore be useful for monetary policy as it will improve the understanding of the linkages between property asset prices and financial assets. The National Bank of Georgia compiles a rudimentary index that tracks residential and commercial property prices in two districts of Tbilisi—one is known for expensive properties and the other for modestly priced properties. The index is therefore quite limited and is not disseminated.

On the RPPI, the mission proposed that, as a start, the index be restricted to the capital city and cover all transactions in new apartments and houses. Initially, the index will not include transactions in existing dwellings because of the complexity in covering these dwellings. Existing dwellings may be covered at a later stage when the RPPI methodology is stabilized and the staff gain the experience and skills in compiling the index.

Geostat should be able to compile the RPPI on a quarterly basis and disseminate the first index for the first quarter of 2021, in mid-May 2021. The RPPI will be developed by the same staff compiling the CPI; however, the production schedule for the RPPI can be arranged around the production and release schedule for the CPI to accommodate the available staff
resources. Based on the current CPI production schedule and the proposed RPPI development plan, additional staff would not be required.

The most suitable data source for the RPPI may be the National Agency of Public Registry of Ministry of Justice (NAPR). Geostat informed the mission that it is compulsory to
register all transactions in dwellings with the NAPR. Therefore, the NAPR may collect information on transaction value, transactors, dwelling specifications, and location. An alternative source would be the two main websites for real estate transactions.”