The Importance of Real Estate Price Indices in Financial Crisis and the Approaches for Constructing Them

Pricing the real estate property and pre-determining increasing and decreasing movements in prices by establishing the real estate price index in the country have an important place in order to provide price stability in national economies and predict formation of financial crisis. In this context, when world-wide examples are considered, the unit method (and stratified real estate price index), the repeat sales methodology and the hedonic regression approach are used in preparation of the real estate price indices, and compiling price-related data is important as well as selecting the method to be used in indices. Academic studies focusing on the real estate price indices have revealed that deed data, data of real estate appraisal companies, price data obtained from the real estate project producers and announcements related to the real estates, put on the market, are used in compiling the prices. Along with comprehensive literature research, the most important purpose of the related study is to address the methods used to establish the real estate price indexes and to emphasize their importance for financial markets.