Workshop on Residential Property Price Indices RPPI Handbook Chapter 8: Appraisal-Based Methods

Contents 8.1 Introduction 8.2 Sale price appraisal ratio method 8.3 Main advantages and disadvantages To be added: 8.4 Example for the Dutch town of “A” Chapter 8

8.1 Introduction Standard matched-model methodology not possible due to low incidence of resales (and quality change) One solution: use of assessed values in repeat sales procedure Sale price appraisal ratio (SPAR) method: assessed values as base period price in standard methodology (Re-scaling needed) Chapter 8

8.2 Sale price appraisal ratio method Index adjusts for compositional change (with respect to base period) Arithmetic and geometric variants possible Can be given a regression interpretation (Limited) evidence suggests good performance Chapter 8

8.3 Main advantages and disadvantages Essentially a standard matched model method Admin data may be available More efficient than repeat sales and probably less sample selection bias; no revision Entirely dependent on the quality of assessment information Cannot deal adequately with net depreciation Chapter 8