ABSTRACT
This chapter reviews the different types of appraisal-based indices and the key performance measures that are produced from them. It identifies the international coverage of such indices and highlights the issues surrounding the use of appraisals to measure real estate performance. In the UK, attempts to construct real estate price and performance indices started in the 1960s and 1970s. Right from the beginning, the real estate investment industry resorted to appraisals as a substitute for transaction prices, to overcome the problems with constructing transaction-based indices. In the US, the National Council of Real Estate Investment Fiduciaries (NCREIF) was established in 1982 and collected data on individual properties to facilitate construction of an appraisal-based real estate return index. As the pioneers of constructing indices that have both significant market coverage and depth in terms of individual property details, MSCI and NCREIF are the two best-known providers of real estate investment indices.
