Measuring New Housing Prices in Pre-Sale Markets: A Repeat-Sales Approach Using Purchase Contract Cancellations

Francisco Javier Lozano ()
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Francisco Javier Lozano: Chilean Chamber of Construction

International Real Estate Review, 2026, vol. 29, issue 2, 279-317

Abstract: In markets dominated by pre-sales, which is a structural feature of housing provision in emerging economies, constructing price indices is limited by the lack of resale history. Addressing this statistical blind spot, this study proposes a novel empirical strategy which exploits purchase contract cancellations to identify repeat-sales pairs. Utilizing a dataset of 25,049 pairs from Santiago (2013–2024) in Chile, this approach mitigates depreciation bias by comparing the same never-occupied unit over time. Results from geometric and arithmetic estimators reveal three key findings: (1) a distinct price hierarchy, where capital appreciation disproportionately favors entry-level housing and investment segments; (2) the index serves as a leading indicator, which anticipated the post-2021 market correction ahead of official administrative records; and (3) a 27% nominal loss rate in subsequent placements, which exposes the magnitude of price adjustments consistent with liquidity frictions. These findings validate cancellations not merely as administrative voids, but as real-time signals of financial distress, thus offering a replicable monitoring tool for global jurisdictions reliant on the pre-sale leverage model.

Keywords: Housing price index; Repeat sales; Contract cancellations; Pre-sale market; Leading indicator (search for similar items in EconPapers)
Date: 2026
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