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The repeat sales house price index (HPI) has been widely used to measure house price movements on the assumption that the quality of properties does not change over time. This study aims to develop a novel improvement-value adjusted repeat sales (IVARS) HPI to remedy the bias owing to the constant-quality assumption.

This study compares the performance of the IVARS model with the traditional hedonic price model and the repeat sales model by using half a million repeated sales pairs of housing transactions in the Auckland Region of New Zealand, and by a simulation approach.

The results demonstrate that using the information on improvement values from mass appraisal can significantly mitigate the time-varying attribute bias. Simulation analysis further reveals that if the improvement work done is not considered, the repeat sales HPI may be overestimated by 2.7% per annum. The more quality enhancement a property has, the more likely it is that the property will be resold.

This novel index may have the potential to enable the inclusion of home condition reporting in property value assessments prior to listing open market sales.

The novel IVARS index can help gauge house price movements with housing quality changes.

The purpose of this paper is to examine if temporal aggregation matters in the construction of house price indices and to test the accuracy of alternative index construction methods.

Five index construction models based on the hedonic, repeat‐sales and hybrid methods are examined. The accuracy of the alternative index construction methods are examined using the mean squared error and out‐of‐sample technique. Monthly, quarterly, semi‐yearly and yearly indices are constructed for each of the methods and six null hypotheses are tested to examine the temporal aggregation effect.

Overall, the hedonic is the best method to use. While running separate regressions to estimate the index is best at the broader level of time aggregation like the annual, pooling data together and including time dummies to estimate the index is the best at the lower level of time aggregation. The repeat‐sales method is the least preferred method. The results also show that it is important to limit time to the lowest level of temporal aggregation when construction property price indices.

This paper provides alternative method, the mean squared error method based on an out‐of‐sample technique to evaluate the accuracy of alternative index construction methods.

The introduction of financial products like the property derivatives and home equity insurances to the financial market calls for accurate and robust property price indices. However, the index method and level of temporal aggregation to use still remain unresolved in the index construction literature. This paper contributes to fill these gaps.

The purpose of this research is to show how the measurement of the effect of flooding on house value can be invaluable information for professional valuers and homeowners alike. In the UK, even for an event as devastating as the autumn 2000 flood, the number of properties affected in any one town is small and so robust estimation is problematic and methodology applied elsewhere needs modification. A new framework for analysing the effect of flooding on house value in the UK is presented.

Data issues play a crucial role in determining the methodology employed in any analysis. A repeat sales methodology is proposed which allows for the tracking of effects through time. The analysis can be extended to multiple sites via a block design thereby increasing the sample size.

Empirical analysis of one case study site demonstrates the inherent small sample problem and yet reveals patterns that fall in line with expected outcomes in many respects.

The case study results are illustrative only. A programme of further analysis is planned which includes comparison of the new framework with more traditional approaches.

A novel methodology is developed tracking the temporal variability in flood effect. The minimisation of data requirements inherent in the model allows for transfer to multiple sites and easy updating of the analysis.

The size and number of employment subcenters have increased in large metropolitan areas as the spatial distribution of jobs has become increasingly decentralized. Although employment decentralization is not a new phenomenon, only recently have concentrations of employment outside the central city begun to rival the traditional central business district (CBD) in size and scope. Because of this change, neither theoretical nor empirical models in urban economics now rely solely on the traditional monocentric city model of Muth (1969) and Mills (1972). Instead, recent research incorporates some version of a polycentric model, a trend that Anas et al. (1998) document in their excellent review article.

This paper examines commonly used property price indices in several Commonwealth countries. It finds that many of the measures may be flawed owing to two issues relating to the index construction methodology: the quality change problem and the choice of an index number algorithm. Using data that comprises the universe of transactions for the Singapore residential market, alternative indices based on more rigourous estimation models are constructed that aim to mitigate these problems. When compared to the official benchmark indices, deviations in time series price behaviour are evident particularly for short‐run dynamics. A key implication of the results is the importance of explicitly recognizing the biases that can arise from using extant indices. Otherwise, a reliance on flawed index signals for decision‐making may result in distorted allocations.

The purpose of this paper is to demonstrate the application of robust techniques to the estimation of hedonic house price indexes.

The authors use simulation analysis to compare an index estimated using ordinary least squares (OLS) with several indexes estimated using robust techniques. The analysis uses sales transactions data from a US city. The authors then explore how robust methods can correct for omitted variables under some circumstances and how they affect the revision problem that occurs when longitudinal hedonic indexes are updated.

Robust methods can resolve missing variable problems in some circumstances and also can substantially reduce the revision problem in longitudinal hedonic indexes.

Robust techniques may be preferable to OLS when constructing longitudinal hedonic indexes.

This is the first paper to undertake a systematic analysis of the applicability of robust techniques in constructing hedonic house price indexes.

This paper develops a new decomposition method of the housing market variations to analyse the housing dynamics of the Australian eight capital cities.

This study reviews the prior research on analysing the housing market variations and classifies the previous methods into four main models. Based on this, the study develops a new decomposition of the variations, which is made up of regional information, home‐market information and time information. The panel data regression method, unit root test and F test are adopted to construct the model and interpret the housing market variations of the Australian capital cities.

This paper suggests that the Australian home‐market information has the same elasticity to the housing market variations across cities and time. In contrast, the elasticities of the regional information are distinguished. However, similarities exit in the west and north of Australia or the south and east of Australia. The time information contributes differently along the observing period, although the similarities are found in certain periods.

This paper introduces the housing market variation decomposition into the research of housing market variations and develops a model based on the new method of the housing market variation decomposition.

The purpose of this paper is to present the progress and trends of the literature on art as an investment and to outline potential research lines to be developed.

This work gathers, analyses and critically discusses the attributes of investments in art in general, and in Latin American art in particular.

Most studies report that art (art in general, and Latin American in particular) has offered relatively low but positive real returns, which have tended to be below those offered by stocks and similar to those realized by bonds. Art has a low correlation with other investments.

The literature on the attributes of Latin American art as an investment is limited and new research would help to close the knowledge gap with respect to this segment of the art market as it continues to grow.

Similarly to the research carried out into other segments of the art market, studies on Latin American art suggest that the works of art are worth more, ceteris paribus: the more renowned the artist, the larger the work, whether they were executed in oil, and if they were auctioned at Sotheby’s or Christie’s. The paper also details a series of practical implications for those who participate in the art market.

To the best of the authors’ knowledge, this is the first exhaustive review of the literature on the attributes of Latin American art as an investment. The findings of this study are useful for academics, art collectors, auction houses, gallerists and others who take part in the arts market.

Presentar los avances y las tendencias de la literatura sobre el arte como inversión, y delinear líneas de investigación a ser desarrolladas.

Este trabajo reúne, analiza y discute críticamente los atributos de inversión del arte, en general, y latinoamericano, en particular.

La mayoría de los estudios reportan que el arte (tanto el arte, en general, como el arte latinoamericano, en particular) ha ofrecido rendimientos reales positivos, aunque relativamente bajos, los cuales tienden a ser inferiores de los de las acciones y a ser similares a los de los bonos. El arte tiene una baja correlación con otras inversiones.

La literatura sobre los atributos del arte latinoamericano como inversión es limitada. Es de esperar que nuevas investigaciones permitan ir cerrando la brecha del conocimiento con respecto a esta parte del mercado del arte a la par que éste continúe creciendo.

Los estudios de arte latinoamericano sugieren, similar a las investigaciones sobre otros segmentos del mercado del arte, que las obras de arte valen más, ceteris paribus: cuando el artista es más reputado, a medida que el área de las obras es mayor, si han sido ejecutadas en óleo, y cuando son subastadas en las casas de subastas Sotheby’s o Christie’s. En el trabajo se detallan, además, una serie de implicaciones prácticas para los participantes del mercado de arte.

Hasta donde se ha podido comprobar, esta es la primera revisión exhaustiva acerca de los atributos del arte latinoamericano como inversión. Los resultados de esta investigación son de utilidad para: académicos, coleccionistas de arte, casas de subastas, galeristas, y demás participantes en el mercado del arte.

While the development of real estate derivative contracts has important implications for real estate as an asset class, it has not been widely accepted in Asia. This paper aims to examine the issues involved in developing the real estate derivative market for Singapore.

The concept of real estate derivatives is reviewed. The limitations to the extant real estate index are discussed. Different approaches to constructing real estate indices are discussed in particular reference to the features of the Singapore real estate market.

The Singapore residential market is dominated by public housing, heterogeneity and relatively low turnover. The applicability of repeat sales approach may not be well suited. Geostatistical models appear promising. The commercial real estate market suffers from even lower turnover. The most appropriate commercial real estate index could be similar to that offered by IPD. Several issues were also highlighted. First, the index must pass the stringent scrutiny of academia and experts. Second, the index must be well understood and accepted by the industry. Third, the index must be published in a timely fashion and without biases. Fourth, there must be a trustworthy producer of the index.

For an index to be accepted, it must satisfy the issue of fungibility. International investors looking for exposure or hedging strategies are likely to be familiar with established methodologies such as the repeat sales and appraisal‐based approaches.

Market acceptability of RED. If the experience in Europe is anything to go by, this is not an insurmountable issue that cannot be addressed with education and knowledge dissemination.

While real estate derivatives have immense potential and a tremendous growth in its development in Europe has been witnessed, it is clear that the real estate derivative industry is in its infancy. The paper examines the issues peculiar to Singapore with regard to the establishment of real estate derivative contracts. The paper is of interest to policy makers and industry practitioners.

The purpose of this paper is to provide technically robust indicators of housing market performance from the records held by the Ghana Land Valuation Board, through the construction of the first ever residential price and rent indices for the aggregate and disaggregate markets.

The approach involved time series produced from hedonic models using 3,250 transaction‐based data, running from 1992 to 2007, and documents on movements in capital and rental values in Accra and Tema, the dominant commercial conurbations in the country.

The paper makes a major contribution to knowledge and understanding of housing market dynamics in Ghana. The results suggest that the derived price and rent indices look, at first sight, reasonably plausible with cyclical trends showing weak and strong patches.

The paper focuses on the development of formal housing markets through a detailed case study of Ghana, and provides findings and models of a wider application in other emerging economies.