In France, housing price indices have been computed since 1996 for second‑hand dwellings (Indices Notaires-Insee) and since 2013 for new dwellings (Indice des prix des logements neufs). The evolution and volatility of the two indices differ. We explore why using notarial data and surveys on new home sales (ECLN) and the price of building land (EPTB). The computation methods and the scopes of the indices contribute relatively little to the differences. The location of new and old housing differs, but this still explains only part of the differences. Decomposing a home value between that of land and that of buildings reveals that the share of land is higher for second-hand than for new dwellings. Land and second-hand dwellings price indices evolve in a very similar way. Structures prices have a greater influence on the price index of new housing prices. Nevertheless, construction costs are sensitive to the trend in land prices. The countercyclical construction of social housing may have contributed to reduce the volatility of new housing prices.

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Balcone, T. & Laferrère, A. (2018). New or old, why would housing price indices differ? An analysis for France. Economie et Statistique / Economics and Statistics, 500-501-502, 69–95.
https://doi.org/10.24187/ecostat.2018.500t.1946