Work detail

Spatial approaches to hedonic modelling of housing market: Prague case

Author: Bc. Marek Lipán
Year: 2016 - summer
Leaders: Mgr. Tomáš Křehlík M.A., Ph.D.
Consultants:
Work type: Bachelors
Language: English
Pages: 73
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/165784/
Abstract: Having at hands instruments capable of effective housing appraisal can be essential not only for
the real property evaluator in a bank, policy maker or real estate agent, but also for single
individual seeking for an objective way to assess the tenure choice decisions. The housing market
data are of a spatial nature. We address the spatial issues by implementing spatial modelling
techniques into a hedonic price model. The main focus of the thesis is put on building a kriging
model, which shows to be a powerful tool in explaining and predicting the prices of housing in
the Prague at market. The kriging model comes out the best from the comparison of performance
with the traditional spaceless hedonic pricing model as well as the common econometric spatial
models. The usefulness of our kriging model is demonstrated in a possible application as the
extension of the net present value model of the optimal tenure choice for a prospective first home
owner. In a simplified economic scenario we found that the optimality of the tenure choice
depends on the inflation, expected holding period as well as the precise location of the flat in the
Prague.
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