Say if 2 year rolling averages, with q8 latest.Rolling averages smooths out volatility and makes graph smoother.Q1, Q2....Q8.100,100,110,110,120,120,130,130 (actual price index at quarter).URA if straight average (or if each quarter given equal weight or 1/8) give 115.i.e. URA result gives index 15 below current transactions (or off over 10%).ps This result is also a bit like dollar cost averaging...However, since most recent transactions are more relevance to current deals you give more weighting, e.g100 (0.25/8), 100 (0.5/8), 110 (.75/8), 110 (.75/8), 120 (1.25/8), 120 (1.25/8), 130 (1.5/8), 130 (1.75/8).This gives 120.3125, a bit closer to latest transactions.Obviously, if you give 0 weighting to earlier, and 100% to last, you get 130.So end result is how much weighting you give..In my opinion, I think index is approx 5 quarters behind (based on peak in March/April 2007, URA index only fell 3Q2008). Hence if prices pick up 4Q, may not show til over 1 year later. Finally, even on latest transaction figure, there is a delay in lodging S&P of almost 2 months (ie prices may have fallen 10% in Oct vs Sep, but won't show for a few months).Since no esteemed person in this forum has given the answer to weighting, I suspect actual weighting not given (bit like SGD $NEER).For statisticians/planning, smoothing is justified. However, if you are planning to buy at a particular point, this become irrelevant as last price most important (you cannot dollar cost average a house purchase).All this is irrelevant when it comes to buying/selling now. Hence rely on agents, mortgage broker etc to give you idea of current market.