scholarly journals THE DEVELOPMENT OF PENANG SHOP PRICE INDEX (PSPI) USING LASPEYRES HEDONIC PRICE MODEL

2021 ◽  
Vol 19 (17) ◽  
Author(s):  
Mohamad Hafiz Jamaludin ◽  
Suriatini Ismail ◽  
Norziha Ismail
Keyword(s):  
Continuous Monitoring ◽  
Price Index ◽  
Hedonic Model ◽  
Hedonic Price ◽  
Price Model ◽  
Property Market ◽  
Pilot Studies ◽  
Commercial Property ◽  
Independent Variables ◽  
Property Price

The index is considered an important benchmark and is a decision-making tool in the financial and capital markets, as well as in the property market. In Malaysia, continuous monitoring of property price movements is important as almost half of banking exposure is on property. Further, NAPIC has published indicators displaying the performance of property such as MHPI and PBO-RI. However, indicators regarding the price of commercial property are still less widely published in Malaysia. This study was conducted to develop indicators related to the price of commercial property, especially to shop property. This study has focused on the state of Penang as a study area. The literature review methodology is used to identify existing methods and practices used in developing the index of commercial property both in Malaysia and internationally. In determining the appropriate form of hedonic functions for the development of PSPI, analysis of dependent and independent variables was performed. Meanwhile, the development of the index is based on the Laspeyres hedonic model which is the same as the development of MHPI and PBO-RI. The development of PSPI will be able to help the industry and investors to make decisions and benchmark the performance of shop. This is also one of the pilot studies in Malaysia to form an indicator of commercial property.

scholarly journals A Priori Spatial Segmentation of Commercial Property Market using Hedonic Price Modelling

2021 ◽  
Vol 29 (2) ◽  
pp. 16-28
Author(s):  
Hamza Usman ◽  
Mohd Lizam ◽  
Burhaida Burhan
Keyword(s):  
Housing Market ◽  
Market Segmentation ◽  
A Priori ◽  
Model Fit ◽  
Hedonic Model ◽  
Hedonic Price ◽  
Property Market ◽  
Commercial Property ◽  
Spatial Segmentation ◽  
Property Price

Abstract The improvement of property price modelling accuracy using property market segmentation approaches is well documented in the housing market. However, that cannot be said of the commercial property market which is adjudged to be volatile, heterogeneous and thinly traded. This study, therefore, determines if the commercial property market in Malaysia is spatially segmented into submarkets and whether accounting for the submarkets improves the accuracy of price modelling. Using a 11,460 shop-offices transaction dataset, the commercial property submarkets are delineated by using submarket binary dummies in the market-wide model and estimating a separate hedonic model for each submarket. The former method improves the model fit and reduces error by 5.6% and 6.5% respectively. The commercial property submarkets are better delineated by estimating a separate hedonic model for each submarket as it improves the model fit by about 7% and reduces models’ error by more than 10%. This study concludes that the Malaysian commercial property market is spatially segmented into submarkets. Modelling the submarkets improves the accuracy and correctness of price modelling.

scholarly journals PEMBANGUNAN INDEKS HARGA HARTA TANAH WARISAN: KEDAI PRAPERANG (PW-SPI) PULAU PINANG, MALAYSIA

2021 ◽  
Vol 9 (1) ◽  
pp. 69-93
Author(s):  
MOHAMAD HAFIZ JAMALUDIN ◽  
SURIATINI ISMAIL ◽  
AINA EDAYU AHMAD
Keyword(s):  
Price Index ◽  
Rapid Development ◽  
Development Trend ◽  
Heritage Management ◽  
World Heritage Site ◽  
Hedonic Model ◽  
Property Market ◽  
Graphical Comparison ◽  
Property Price ◽  
George Town

Abstrak Pengiktirafan Bandar George Town sebagai Tapak Warisan Dunia (TWD) UNESCO telah membawa kepada usaha pemuliharaan harta-harta warisan seperti pelaksanaan Pelan Pengurusan Warisan dan pewartaan Akta Warisan Kebangsaan 2005. Antara elemen warisan yang perlu dipelihara berkaitan harta tanah ialah kedai pra-perang. Kedai pra-perang merupakan kedai yang telah dibina dan dibangunkan sebelum perang dunia pertama pada tahun 1914. Ciri-ciri warisan yang ada pada kedai pra-perang perlu dipelihara dari segi ciri fizikalnya. Walau bagaimanapun, dengan arus pembangunan yang semakin pesat, semua usaha ini perlu penglibatan para pelabur dalam sektor harta tanah. Justeru, objektif kajian ini adalah untuk membangunkan Indeks Harga Kedai Praperang Pulau Pinang (PW-SPI) bagi mewujudkan indikator yang dapat membantu para pelabur dalam membuat keputusan pelaburan dalam pasaran harta tanah praperang. Kajian ini melibatkan pembangunan PW-SPI menggunakan Model Hedonik Laspeyres. PW-SPI yang dibangunkan membolehkan perbandingan secara grafik dibuat ke atas pergerakan harga harta tanah warisan di Pulau Penang. Ia menunjukkan bahawa bagi tempoh 2008-2014, harta tanah kedai praperang di Pulau Pinang mempunyai pertumbuhan harga yang lebih baik berbanding kedai bukan praperang. Kajian pertama di Malaysia berkaitan indeks harga harta tanah warisan ini boleh diulang dengan melibatkan kawasan geografi yang lebih luas. Ini kerana ia terbukti dapat membantu para pelabur dalam membuat keputusan pelaburan berkaitan harta tanah kedai praperang melalui perbandingan.   AbstractThe recognition of George Town City as a World Heritage Site (TWD) UNESCO has led to the conservation efforts such as the implementation of the Heritage Management Plan and the publication of the National Heritage Act 2005. Among the elements of heritage that need to be preserved in relation to property are pre-war shops. Pre-war shops are shops that were built and developed before the first world war in 1914. The pre-war shops need to be preserved in terms of its physical features. However, with the rapid development trend, implementing this goal needs the involvement of investors in the real estate sector. Thus, the objective of this study is to develop the Penang Pre-war Shop Price Index (PW-SPI) in order to create an indicator that can help potential investors in making investment decisions related to the pre-war property market. PW-SPI was developed using the Laspeyres Hedonic Model. The developed PW-SPI has enabled a graphical comparison be made about heritage property price movement in Penang. It indicates that for the period 2008-2014 the pre-war shops in Penang had better price growth than the non pre-war shops. This earliest study of heritage property price index in Malaysia could be replicated to include data of other geographical areas. It is shown that it can help potential investors in making investment decision related to heritage property of shophouse through graphical comparison.

scholarly journals Residential Property Behavior Forecasting in the Metropolitan City of Milan: Socio-Economic Characteristics as Drivers of Residential Market Value Trends

2021 ◽  
Vol 13 (7) ◽  
pp. 3612
Author(s):  
Marzia Morena ◽  
Genny Cia ◽  
Liala Baiardi ◽  
Juan Sebastián Rodríguez Rojas
Keyword(s):  
Hedonic Model ◽  
Hedonic Price ◽  
Analysis Model ◽  
Property Market ◽  
Property Development ◽  
Price Performance ◽  
Real Estate Investments ◽  
Residential Properties ◽  
Asset Class ◽  
Residential Market

The phenomenon of urbanization of cities has been the subject of numerous studies and evaluation protocols proposing to analyze the degree of economic and social sustainability of development projects. Through careful research and synthesis of the theoretical framework regarding residential properties’ performance measurement and forecasting, this paper goes deeper into the proposition of property development as an asset class that represents the biggest share of the Italian property market and yet is avoided by the big portfolios. The analysis model was applied to the city of Milan and its Metropolitan Area. The method is based on the development of correlation indices to evaluate different behaviors, through time and a Geographic Information System (GIS) based on the Hedonic Price Method (HPM). Results from a hedonic model estimated for several recent years suggest that, depending on the particular view, the relation between the rent/price performance and the different external and intrinsic variables can represent a useful parameter for evaluating the feasibility of different real estate investments.

scholarly journals Determinant of Residential Property Price Index in Five Asian Emerging Market Countries: A Demand and Supply Approach

2021 ◽  
Vol 7 (08) ◽  
Author(s):  
Silma Fikria Balqis ◽  
Rudi Purwono
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Real Interest Rate ◽  
Price Index ◽  
Emerging Market ◽  
Residential Property ◽  
Demand And Supply ◽  
Independent Variables ◽  
Emerging Market Countries ◽  
Property Price

This study aims to analyze the factors influencing the Residential Property Price Index (RPPI) from the demand and supply sides in five Asian emerging market countries. The data used are semi-annual data from the first semester of 2009 until the second semester of 2019 because this study aims to denote the impact of RPPI toward the demand and supply indicators after the global crisis in 2008. The dependent variable of this study is the RPPI, while the independent variables include the number of workers, real interest rate, economic growth, and the Real Effective Exchange Rate (REER). The Fixed Effects Model (FEM) is thus the applied method to process the data. In the end, the results indicate that all independent variables are significant toward the RPPI. The number of workers, real interest rate, and REER negatively affect the RPPI, while economic growth positively affects the RPPI.

scholarly journals International Real Estate Review

2013 ◽  
Vol 16 (3) ◽  
pp. 296-322
Author(s):  
Damrongsak Rinchumphu ◽  
◽  
Chris Eves ◽  
Connie Susilawati ◽  
◽  
...  
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Explanatory Power ◽  
Metropolitan Region ◽  
Hedonic Price ◽  
Price Model ◽  
Lot Size ◽  
Price Increases ◽  
Property Prices ◽  
Property Price

This paper aims to evaluate the brand value of property in subdivision developments in the Bangkok Metropolitan Region (BMR), Thailand. The result has been determined by the application of a hedonic price model. The development of the model is developed based on a sample of 1,755 property sales during the period of 1992-2010 in eight zones of the BMR. The results indicate that the use of a semi-logarithmic model has stronger explanatory power and is more reliable. Property price increases 12.90% from the branding. Meanwhile, the price annually increases 2.96%; lot size and dwelling area have positive impacts on the price. In contrast, duplexes and townhouses have a negative impact on the price compared to single detached houses. Moreover, the price of properties which are located outside the Bangkok inner city area is reduced by 21.26% to 43.19%. These findings also contribute towards a new understanding of the positive impact of branding on the property price in the BMR. The result is useful for setting selling prices for branded and unbranded properties, and the model could provide a reference for setting property prices in subdivision developments in the BMR.

CONSTRUCTING HOUSING PRICE INDEX FOR TERRACED PROPERTIES IN JOHOR BAHRU, MALAYSIA

2021 ◽  
Vol 19 (17) ◽  
Author(s):  
Wendy Wen Xin Lim ◽  
Burhaida Burhan ◽  
Mohd Lizam Mohd Diah
Keyword(s):  
Price Index ◽  
Housing Prices ◽  
Housing Price ◽  
Hedonic Price ◽  
Property Market ◽  
Price Variation ◽  
Vector Property ◽  
Hedonic Price Analysis ◽  
Housing Price Index ◽  
Housing Attributes

Housing is a country’s biggest asset. Hence, the pattern of the housing price index (HPI) is an important topic to gain insight into the housing market while identifying the prevailing housing issues. The determinants of housing price vary for each city and state based on the different characteristics in each location. Accordingly, HPI should consider the property’s quality differences. Besides, national HPI is insufficient and restricted to the housing price at the state level. Thus, the study focused on constructing a specified HPI model for different cities, districts, and states. Effective HPI can give parties a better idea of the current property market situation and act as an analytical tool in managing the sector. Specifically, the study aims to examine the relationship between the heterogeneity housing attributes and housing prices of the terraced properties in Johor Bahru, Malaysia. Additionally, the study provides detailed information on the key determinants of the housing price variation in Johor Bahru. Hedonic price analysis is useful in constructing HPI, expressing housing price as a function of vector property characteristics. Furthermore, HPI is constructed based on the yearly indices and by pooling the data into certain periods. The results show the percentage of variance explained by the factors of HPI for the terraced properties in Johor Bahru. Correspondingly, the underlying correlation between the tested housing attributes with the housing price is explained through the analysis results.

The London Commercial Property Price Index

2012 ◽  
Author(s):  
Andrea Chegut ◽  
Piet M. A. Eichholtz ◽  
Paulo Rodrigues
Keyword(s):  
Price Index ◽  
Commercial Property ◽  
Property Price

scholarly journals Intrinsic bubbles and Granger causality in the Hong Kong residential property market

2019 ◽  
Vol 13 (1) ◽  
Author(s):  
Ting Lan
Keyword(s):  
Hong Kong ◽  
Granger Causality ◽  
Price Index ◽  
Residential Property ◽  
Property Market ◽  
Speculative Bubbles ◽  
Property Price ◽  
Show Evidence ◽  
Causality Tests ◽  
Housing Bubbles

Abstract This study uses the intrinsic bubbles detection method to identify housing bubbles in the Hong Kong residential property market. By using sample period data from 1993 to 2019, the empirical results show evidence of intrinsic bubbles. Based on the unit root and co-integration tests, I found that there are no rational speculative bubbles in the Hong Kong residential property market. Furthermore, by using the Granger causality tests of the corresponding asymmetric VECM specification, there is no causality from lagged changes in the rental price returns to changes in the property price returns. However, there is strong evidence to show that changes in the property price index returns can Granger cause changes in the rental price index returns.

scholarly journals Property Price Modelling, Market Segmentation and Submarket Classifications: A Review

2020 ◽  
Vol 28 (3) ◽  
pp. 24-35 ◽  
Author(s):  
Hamza Usman ◽  
Mohd Lizam ◽  
Muhammad Usman Adekunle
Keyword(s):  
Statistical Data ◽  
A Priori ◽  
Relevant Literature ◽  
Aggregation Bias ◽  
Hedonic Price ◽  
Property Market ◽  
Price Prediction ◽  
Property Price ◽  
The Subject

AbstractAccurate pricing of the property market is necessary to ensure effective and efficient decision making. Property price is typically modelled using the hedonic price model (HPM). This approach was found to exhibit aggregation bias due to its assumption that the coefficient estimate is constant and fails to consider variation in location. The aggregation bias is minimized by segmenting the property market into submarkets that are distinctly homogeneous within their submarket and heterogeneous across other submarkets. Although such segmentation was found to improve the prediction accuracy of HPM, there appear to be conflicting findings regarding what constitutes a submarket and how the submarkets are to be driven. This paper therefore reviews relevant literature on the subject matter. It was found that, initially, submarkets were delineated based on a priori classification of the property market into predefined boundaries. The method was challenged to be arbitrary and an empirically statistical data-driven property submarket classification was advocated. Based on the review, there is no consensus on the superiority of either of the methods over the another; a combination of the two methods can serve as a means of validating the effectiveness of property segmentation procedures for more accurate property price prediction.

Predicting property price index using artificial intelligence techniques

2019 ◽  
Vol 12 (6) ◽  
pp. 1072-1092 ◽  
Author(s):  
Rotimi Boluwatife Abidoye ◽  
Albert P.C. Chan ◽  
Funmilayo Adenike Abidoye ◽  
Olalekan Shamsideen Oshodi
Keyword(s):  
Artificial Intelligence ◽  
Real Estate ◽  
Price Index ◽  
Policy Formation ◽  
Support Vector ◽  
Ann Model ◽  
Property Market ◽  
Content Type ◽  
Property Prices ◽  
Property Price

Purpose Booms and bubbles are inevitable in the real estate industry. Loss of profits, bankruptcy and economic slowdown are indicators of the adverse effects of fluctuations in property prices. Models providing a reliable forecast of property prices are vital for mitigating the effects of these variations. Hence, this study aims to investigate the use of artificial intelligence (AI) for the prediction of property price index (PPI). Design/methodology/approach Information on the variables that influence property prices was collected from reliable sources in Hong Kong. The data were fitted to an autoregressive integrated moving average (ARIMA), artificial neural network (ANN) and support vector machine (SVM) models. Subsequently, the developed models were used to generate out-of-sample predictions of property prices. Findings Based on the prediction evaluation metrics, it was revealed that the ANN model outperformed the SVM and ARIMA models. It was also found that interest rate, unemployment rate and household size are the three most significant variables that could influence the prices of properties in the study area. Practical implications The findings of this study provide useful information to stakeholders for policy formation and strategies for real estate investments and sustained growth of the property market. Originality/value The application of the SVM model in the prediction of PPI in the study area is lacking. This study evaluates its performance in relation to ANN and ARIMA.

Sign in / Sign up

Export Citation Format

Share Document