Establishment And Simulation Of Real Estate Price Index

With the development of real estate markets, the risk of this industry has become an urgent problem. It is very important to give a price index of real estate market in virtue of scientific method. Real estate price index is a relative quantitative indicator that reflects changes of the price in real estate market in different period. The price index reflects the changes of price caused by supply and demand of the market and purchasing power of the currency.Nowadays, price indexes of real estate market published in China are generally based on the method of mean, which ignore the changes of price caused by quality of the property. These price indexs assume that real estate with the same quality,such as with the same numbers of rooms and so on. Actually,the assumption does not exist. Therefore, these price indexes are not efficient.Hedonic price theory is an important theoretical basis on foreign real estate price index-The theory solves the problem coursed by different quality of real estate. By constructing a model, it can get rid off the changes of price that caused by quality of the property. So this method is more efficient than the method of mean.To reflects the present situation of the real estate market and the development trend more accurately,this paper takes the index of Beijing real estate residence of China Real Estate Index System (hereinafter referred to as CREIS) as an example, studies the development stage of China’s Real Estate Index and the main methods which are adopted and offer available proposal. The personnel and supervisors can realize the difference between Chinese and international methods in constructing real estate price index system, and certain the long development goal of Chinese future real estate price index system.