Appraisal-based indices for commercial property have been well established for many years, yet it is only in relatively recent times that serious proposals for transaction-based commercial property indices have been put forward. In contrast, in the residential property market, transaction-based property indices have been almost universally accepted; despite their well documented problems. The paper considers existing approaches to measuring movements in the residential property market, issues surrounding index construction and includes a review of the relevant literature. Based on data provided by the Australian Valuation Office, the paper considers the development of an appraisal-based residential property index and discusses its applicability and performance in relation to a number of transaction-based indices used in Australia.