Open AccessThe Application of Regression Analysis for Estimating the Market Value of Commercial Real Estate
Author(s) -
Marek Banaś,
Józef Czaja,
Janusz Dąbrowski
Publication year - 2021
Publication title -
geomatics and environmental engineering
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.144
H-Index - 3
eISSN - 2300-7095
pISSN - 1898-1135
DOI - 10.7494/geom.2022.16.1.17
Subject(s) - real estate , database transaction , economic rent , econometrics , usable , market value , value (mathematics) , regression analysis , market price , market analysis , computer science , business , economics , mathematics , statistics , microeconomics , marketing , finance , world wide web , programming language
The transaction price of a land property with commercial buildings depends on both its quantitative and qualitative attributes. Quantitative attributes include surface areas of plots of land and usable floor spaces of premises and buildings with various intended purposes, as well as values of rents. Qualitative attributes are represented by the global attributes of these properties.In the analysis of the land property market with commercial buildings, all pairs that relate a transaction price to individual attributes are considered. The market value prediction is based on multiple regression analysis for a two-dimensional random variable, represented by the price and the predetermined attribute. The final market value of the property being valued is calculated as the weighted average of the market values predicted for each attribute.This research paper presents the procedure for determining the market value of land with commercial buildings, which falls within the method of statistical analysis of the market. The derived formulas and substantively justified algorithms may be the basis for market analysis and estimation of the market value of such land. This procedure has been thoroughly verified using two practical numerical examples.