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

This article introduces 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 is a hedonic repeated-measures index and is estimated in real terms. An index is also constructed in nominal terms. The average real price increase after World War II is about 3.2% per annum. Nevertheless, the real value of the index in 1973 is only twice as high as it was in 1628. Copyright American Real Estate and Urban Economics Association.