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Alternative Land Price Indexes for Commercial Properties in Tokyo

Walter Diewert () and Chihiro Shimizu

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: The SNA (System of National Accounts) requires separate estimates for the land and structure components of a commercial property. Using transactions data for the sales of office buildings in Tokyo, a hedonic regression model (the Builder’s Model) was estimated and this model generated an overall property price index as well as subindexes for the land and structure components of the office buildings. The Builder’s Model was also estimated using appraisal data on office building REITs for Tokyo. These hedonic regression models also generated estimates for net depreciation rates which can be compared. Finally, the Japanese Government constructs annual official land prices for commercial properties based on appraised values. The paper compares these official land prices with the land prices generated by the hedonic regression models based on transactions data and on REIT data. The results revealed that commercial property indexes based on appraisal and assessment prices lag behind the indexes based on transaction prices.

Keywords: Commercial property price indexes; System of National Accounts; the builder’s model; transaction-based indexes; appraisal prices (search for similar items in EconPapers)
JEL-codes: C2 C23 C43 D12 E31 R21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-mac and nep-ure
Date: 2017-09-11, Revised 2017-09-28
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:erwin_diewert-2017-8

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