Due to the heterogeneous nature of real estate, the construction of a transaction based real estate price index is not a trivial task. This paper introduces the concept of a constant quality real estate price index that reflects the general price trend that is not affected by the quality of the...

The capitalization rate used in real estate literature is the ratio of net operating income to property value. This paper has investigated the capitalization rate movements in Hong Kong from 1987 to 2012. In Hong Kong, capitalization rates for residential and commercial properties were closely...