Repeat Sales and Urban Price Indices: A New Approach

In the framework of the standard repeat-sales model to estimate house price indices, we present a new methodology based on the application of a final compound return (FCR) that is constrained to prevent revisions of past values of the index. The proposed technique, being straightforward, has a strong advantage of a gradual construction of a price estimator year after year. The results obtained for the database sample for Bordeaux region in France demonstrate the validity of the FCR method and are coherent with the estimators calculated by means of well-known techniques within the repeat sales approach.