Chau, K. W., Wong, S. K., Liang, J., McCluskey, W., & Cunningham C. (2018) Chapter 10: Transaction Based Indices in Routledge Companion to Real Estate Investment, MacGregor, B., Schulz, R., Green, R. and Newell, G (Eds), Routledge, 192-212.
32 Pages Posted: 24 Mar 2021
Date Written: February 16, 2021
Due to the heterogeneous nature of real estate, the construction of a transaction based real estate price index is not a trivial task. This paper introduces the concept of a constant quality real estate price index that reflects the general price trend that is not affected by the quality of the real estate transacted. The principles of four commonly used methods for constructing such index are discussed. The implementation of the same method may be different across markets due to differences in data constraints and market characteristics. Cases from Hong Kong and Northern Ireland are used to demonstrate their uses in practice.
Keywords: Real estate price index, constant quaity index, repeat sales index, herdonic price index, transaction-based index
JEL Classification: C18, C29, R30, R39
Suggested Citation: Suggested Citation