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Constant-Quality House Price Indexes for Switzerland

Author

Listed:
  • Steven C. BOURASSA

    (University of Louisville, CEREBEM, BEM Management School)

  • Martin HOESLI

    (University of Geneva, University of Aberdeen, CEREBEM, BEM Management School and Swiss Finance Institute)

  • Donato SCOGNAMIGLIO

    (IAZI / CIFI)

  • Philippe SORMANI

    (IAZI / CIFI)

Abstract

The measurement of house price movements is a vital topic from both academic and practical perspectives and hence has been the focus of much research. There is almost unanimous consensus in the literature that house price indexes should control for the quality of properties; the most widely used methods to attain this aim are the hedonic and repeat sales approaches. The objective of this paper is to compare the Swiss house prices indexes published by the Swiss National Bank (SNB), which are constructed using medians of list prices as published in newspapers and on the internet, to hedonic indexes based on sale prices for the period 1985 to 2006. We find that the list price indexes exhibit quite a different price path than the hedonic indexes during the period. In particular, they appear to overstate price changes in housing markets. We attribute this, at least in part, to changes over time in the composition of the sample of properties on the market.

Suggested Citation

  • Steven C. BOURASSA & Martin HOESLI & Donato SCOGNAMIGLIO & Philippe SORMANI, 2008. "Constant-Quality House Price Indexes for Switzerland," Swiss Finance Institute Research Paper Series 08-10, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp0810
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    References listed on IDEAS

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    Cited by:

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    3. Alain Chaney & Martin Hoesli, 2015. "Transaction-Based and Appraisal-Based Capitalization Rate Determinants," International Real Estate Review, Global Social Science Institute, vol. 18(1), pages 1-43.
    4. Bourassa, Steven & Hoesli, Martin & Scognamiglio, Donato, 2010. "Housing finance, prices, and tenure in Switzerland," MPRA Paper 45990, University Library of Munich, Germany.
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    6. Stadelmann, David, 2010. "Which factors capitalize into house prices? A Bayesian averaging approach," Journal of Housing Economics, Elsevier, vol. 19(3), pages 180-204, September.
    7. Bourassa, Steven C. & Hoesli, Martin & Scognamiglio, Donato & Zhang, Sumei, 2011. "Land leverage and house prices," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 134-144, March.

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    More about this item

    Keywords

    house price indexes; hedonic method; Switzerland;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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