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House Price Index: International Experiences and A Methodology for Application in Egypt (In Arabic)

Authors:

Abstract

In this report, we first review the international experiences of House Price Index (HPI), and we then propose a methodology to apply this index in Egypt. (This report is in Arabic.)
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




        

   


 
          
         


          

House Price Index
      

       
         
           
         



        


    



     
HPI
 




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 
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
       
           
     
 
     
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 
         
            
          
          



           

 The Hedonic Index
   (Hedonic approach)   

Griliches
t
         
 
           
k

     (1)
 j      k
  
y
e

         
 

 The Constrained Hedonic Index

  


           

 
 (2)
D's
c's
 Repeat Sales Index
Repeat Sales

BaileyMuthNourse

  (3)
 y        n
   x       
            
          

      u   

t


 
󰇛󰇜(4)




           


HPI






 













Nationwide House Price
IndexHalifax House Price Index


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Nationwide House Price Index
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
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
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






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
 
OFHEO
HPI







Freddie Mac
Fannie Mae



Freddie Mac
Fannie Mae


 





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


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 
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 
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


 










 




Colliers International





HSBC








   
           

     
          
         




          

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

           

         



 








           



            
         





 


           



           
           
          




  












           

           


           










      





    


 















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





















 

        
            
     
       
   

 
        
 

             
            
  


     



     
           





 

           
        
 
 

         




     
      









     
 
  
    

     

         


         


        
      The Hedonic approach
         

     

        


        
        










 






           



           
           




           
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
           
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         

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
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تاظحم
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

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presented paper at Housing, Housing Finance, and Monetary Policy, an economic symposium
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ResearchGate has not been able to resolve any citations for this publication.
Article
Full-text available
This paper reviews the international literature on house price indices, looking at the basic methodologies employed, the variables chosen for the indices and the functional forms used. Ideas are sought for future improvements to an Irish index and tentative assessments are made of how Irish results correspond to published research findings. Although the recent vintage of hedonic house price indices in Ireland warrants caution in reaching conclusions, there are interesting correspondences with published results. Some issues are identified that will require resolution to achieve further progress.
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Quality differences make estimation of price indexes for real properties difficult, but these can be largely avoided by basing an index on sales prices of the same property at different times. The problem of combining price relatives of repeat sales of properties to obtain a price index can be converted into a regression problem, and standard techniques of regression analysis can be used to estimate the index. This method of estimation is more efficient than others for combining price relatives in that it utilizes information about the price index for earlier periods contained in sales prices in later periods. Standard errors of the estimated index numbers can be readily computed using the regression method, and it permits certain effects on the value of real properties to be eliminated from the index.
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The appropriate functional form for a hedonic price equation cannot in general be specified on theoretical grounds. In this paper, a statistical procedure for the choice of functional form is proposed. A highly general functional form is specified that yields all other functional forms of interest as special cases. Likelihood ratio tests are used to test the appropriateness of alternative forms. The procedure is illustrated using cross section microdata for housing. For the case considered, the functional forms most commonly used in previous studies are strongly rejected.
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This paper investigates whether reliable house price indices can be constructed using a limited set of descriptive variables on a large number of observations. Four primary index methods are compared: (1) median sale price, (2) restricted hedonic, (3) repeat sales, and (4) the assessed-value technique. The paper examines the precision and accuracy of each of the alternative indices.
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The set of real properties sold during a given period of time may be subdivided into several subsets comprising those properties that sold only once, only twice, and three or more times. The major reason for subdividing the sample is to allow estimation of residential price indices by the repeat-sales methodology. The purpose of this paper is to compare price indices estimated with the repeat subsample to indices based on the entire sample. Our data for five metropolitan areas indicate that cumulative price trends for the repeat subsamples can differ from the full samples over periods ranging from two to ten quarters. While short-term price trends can differ widely, there are no systematic differences among the samples over periods of three years or more. The data indicate that arbitrage typically forces prices for the repeat sample to grow at the same rate as those for the full sample. Whether this would be the case in areas experiencing greater disequilibrium than our towns in the Hartford area is uncertain.
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Accurate estimation of price indices for residential property is an essential feature of real estate research, especially in view of recent efforts to forecast price trends for the 1990s. In this article, price trends are estimated by using the sales price, assessed value and date of sale for every residential property transaction between independent parties. This assessed value (AV) methodology is compared to the repeat sales (RS) method. This article develops a simple method for correcting the effect of the measurement errors associated with assessed value. We demonstrate that the large samples available with the AV method allow the measurement error problem to be reduced to negligible proportions. Using data on the Hartford, Connecticut metropolitan area, we find that price trends estimated from the AV and RS methods are substantially similar over a seven-year period. But the RS method is inefficient because it uses a relatively small subset of the data. Our results indicate that it remains inefficient when the researcher has a dataset much richer in repeat sales than ours.
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The tradeoff between risk and return in equity markets is well established. This paper examines the existence of the same tradeoff in the single-family housing market. For home buyers, who constitute about two-thirds of U.S. households, the choice about how much housing and which house to buy is a joint consumption/investment decision. Does this consumption/investment link negate the risk/return tradeoff within the single-family hosuing market? Theory suggests the link still holds. This paper supplies empirical evidence in support of that theoretical result.
House Price Index: Methodology Explained
  • T Baker
  • D Duffy
BAKER, T., and D. DUFFY, 1998. House Price Index: Methodology Explained, Dublin: Irish Permanent.
Hedonic Price Indices for Aotomobiles
  • Z Griliches
GRILICHES, Z., 1961. "Hedonic Price Indices for Aotomobiles", in Z. Griliches (ed.), Price Indices and Quality Change: Studies in New Methods of Measurement, Cambridge: Harvard University Press.