A New Model for Constructing Price Indices Using the Repeat Sales Approach

Analysing the existing unbiased estimators for house price indices in the framework of the repeat sales approach, we discuss the necessity to improve the technique revealing its weak points. We present a new methodology based on the application of a final compound return (FCR). The proposed methodology is simpler and has an advantage of gradual continuity in building up a price estimator year after year. The comparison of results obtained for the real database sample for Bordeaux region in France proves the validity of the FCR and is consistent with all previous results.