Prasada Rao, Michael Scholz and two anonymous referees for their valuable and helpful comments. Hill for his great support as well as Jan de Haan, Robert Inklaar, Alicia Rambaldi, D.S. The author thanks her PhD supervisor Robert J.

A preliminary version was presented at the inaugural conference of the Society of Economic Measurement at the University of Chicago Booth School of Business in 2014 as well as the Annual Meeting of the Austrian Economic Association at the University of Klagenfurt in 2015. This paper is based on the first chapter of the author's dissertation at University of Graz. The author thanks Australian Property Monitors for supplying the data used in this paper. This project has benefited from funding from the Austrian National Bank (Jubiläumsfondsprojekt 14,947) and the JungforscherInnenfonds sponsored by the council of the University of Graz.

Additionally, the index can be evaluated arbitrarily frequently and therefore is well suited for use in property derivatives. Because turbulence in housing markets is often a harbinger of financial crises, such monitoring tools support policymakers and investors in tailoring their decisions and reactions. The resulting index tracks movements in the housing market precisely and in “real-time” and is hence suited for monitoring and assessing housing markets.

Hedonic price index