A simple alternative house price index method

S C Bourassa, Martin Edward Ralph Hoesli, J Sun

Research output: Contribution to journalArticle

74 Citations (Scopus)

Abstract

This paper presents the sale price appraisal ratio (SPAR) method for constructing house price indexes. The method, which uses ratios of transaction prices and previous appraised values, has been applied since the early 1960s to produce semiannual price indexes for regions and cities in New Zealand. We compare the official New Zealand indexes for three urban areas with repeat sales and hedonic indexes created from the same transactions data, and observe that the SPAR method produces an index very much like those produced by repeat sales methods. Given the number of advantages and few disadvantages that we find for the SPAR method relative to the more traditional methods, we maintain that it should be considered by government agencies elsewhere when developing house price indexes. (c) 2006 Elsevier Inc. All rights reserved.

Original languageEnglish
Pages (from-to)80-97
Number of pages18
JournalJournal of Housing Economics
Volume15
Issue number1
DOIs
Publication statusPublished - Mar 2006

Keywords

  • house price indexes
  • repeat sales
  • real estate
  • sample selection
  • methodologies
  • construction
  • regression
  • property
  • dynamics
  • values
  • market

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