The Change in the Prices of Attributes for Newly-built Condominiums in Tokyo Metropolitan Area

Housing price indices are used to measure overall intertemporal price variations. Most models based on hedonic equations assume intertemporal parameter stability, therefore assume the constant price for each attribute of housing during the observation period. However, it is plausible that the valuation of housing attributes shift over time due to income growth, inflation, or other changes in the housing and land market condition. In Japan, consumers were likely to experience this shift between real estate bubble period in 1980's and after-bubble period in 1990s. In this study, we estimate hedonic price equations for various time periods, analyze the shifts of prices for major attributes and find where and when the shift occurred. The study is based on the rich database which contains detailed information for newly-build condominiums collected from developers in Tokyo Metropolitan Area from 1984 to 2000.