Towards non-financial commercial real estate statistics

Past financial crises have shown that unsustainable developments in real estate markets can have a negative impact on economic growth and financial stability. Therefore, monitoring of real estate markets play important role in monetary, macro- and micro-prudential policy frameworks. Although availability of statistics for residential real estate improved significantly since the 2008 financial crisis, large data gaps remain for commercial real estate (CRE), which hampers effective analysis and early identification of possible risks. In October 2016, the ESRB issued Recommendation ESRB/2016/14 on closing real estate data gaps, which was subsequently amended in 2019 with Recommendation ESRB/2019/3. One of aspects addressed by the recommendation is the existing data gaps in the availability and comparability of data on CRE markets. In particular, it indicates the need for harmonised price, rent and rental yield indices compiled with quarterly frequency and with the breakdowns into different property types and into prime and non-prime locations. The features of CRE markets and the available data sources, combined with the granularity of information expected by data users, make developing reliable and timely indicators challenging. In recent years, Eurostat and the Member States have together investigated the feasibility of developing commercial real estate statistics. They have made significant progress particularly on prices and rents, even if practical and methodological challenges remain. This paper presents the progress made by Eurostat and national statistical institutes towards developing non-financial CRE statistics. Moreover, it discusses the main methodological and practical issues faced by data producers. It also informs about the European Commission work aimed at ensuring the future legislative framework for production of official CRE indicators.