A Long Run House Price Index: The Herengracht Index, 1628-1973

Abstract

In this paper I introduce a biennial historic index of real estate values for the period 1628 through 1973. This index is based on the transactions of the buildings on the Herengracht, one of the canals in Amsterdam. Since its development, the quality of the buildings on this canal has been on a constant, high level, which makes the Herengracht a unique sample to base a long run house price index upon. The index I construct is a hedonic repeated-measures index. It is estimated in real terms, and I also construct an index in nominal terms. The average real price increase after World War Two is about 3.2 percent per annum. Nevertheless, the real value of the index in 1973 is only twice as high as it was in 1628.

JEL Classification: N24