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Date: 12/7/2016
Author(s): Anton Belgrave, Tiffany Grosvenor and Shane Lowe
As evident from the 2007/2008 housing crash in the United States of America and other developed countries, the fortunes of the real estate market not only serve as a guide to overall economic activity but have implications for the overall health of a financial system. However, despite the initial efforts of Browne, Clarke and Moore (2008) and the existence of specialised commercial sub-indices, there exists no general real estate price index for Barbados to date. The lack of an official index has spurred the authors’ efforts to create a real estate price index for Barbados using data provided by the nation’s central revenue agency, the Barbados Revenue Authority. Ultimately, the analysis evaluated a number of approaches proposed in the literature for constructing real estate price indices, and attempted to build an appropriate real estate index for the island. The study furthers the initial efforts of Browne, Clarke and Moore (2008)by using a more comprehensive dataset and utilising the actual sale price of houses rather than the listed price. It also provides an analysis of trends over time in real estate prices, a key factor for macroprudential considerations.