View More View Less
  • 1 Budapest University of Technology and Economics, Budapest, Hungary
  • 2 Corvinus University Budapest, Budapest, Hungary
Restricted access

Purchase article

USD  $25.00

1 year subscription (Individual Only)

USD  $700.00

Different valuation methods and determinants of housing prices in Budapest, Hungary are examined in this paper in order to describe price drivers by using an asking price dataset. The hedonic regression analysis and the valuation method of the artificial neural network are utilised and compared using both technical and spatial variables. In our analyses, we conclude that according to our sample from the Budapest real estate market, the Multi-Layer Preceptron (MLP) neural network is a better alternative for market price prediction than hedonic regression in all observed cases. To our knowledge, the estimation of housing price drivers based on a large-scale sample has never been explored before in Budapest or any other city in Hungary in detail; moreover, it is one of the first papers in this topic in the CEE region. The results of this paper lead to promising directions for the development of Hungarian real estate price statistics.

  • Borst, R. A. (1995): Artificial Neural Networks in Mass Appraisal. Journal of Property and Tax Assessment Community, 10(1): 6994.

  • Brorsen, B.Grant, W. R.Rister, M. (1984): A Hedonic Price Model for Rough Rice Bid/Acceptance Markets. American Journal of Agricultural Economy, 66(2): 156163.

    • Search Google Scholar
    • Export Citation
  • Central Statistical Office (CSO) (2005): Housing Conditions at the Turn of the Century. Budapest.

  • Dai, W.Wu, J-Y.Lu, C-J. (2012): Combining Nonlinear Independent Component Analysis and Neural Network for the Prediction of Asian Stock Market Indexes. Expert Systems with Applications, 39(4): 44444452.

    • Search Google Scholar
    • Export Citation
  • Do, Q.Grudnitski, G. A. (1992): Neural Network Approach to Residential Property Appraisal. The Real Estate Appraiser, 58: 3845.

    • Search Google Scholar
    • Export Citation
  • Falzon, J.Lanzon, D. (2013): Comparing Alternative House Price Indices: Evidence from Asking Prices in Malta. International Journal of Housing Markets and Analysis, 6(1): 98135.

    • Search Google Scholar
    • Export Citation
  • Harrison, D.Rubinfeld, D. L. (1978): Hedonic Housing Prices and the Demand for Clean Air. Journal of Environmental Economics and Management, 5(1): 81102.

    • Search Google Scholar
    • Export Citation
  • Horváth, Á.Székely, G. (2009): Usage of Hedonic Method for the Observation of Value Changes of Housing Real eEstate (in Hungarian: Hedonikus módszer alkalmazása a használt lakások áralakulásának megfigyelésében). Statisztikai Szemle, 87(6): 594607.

    • Search Google Scholar
    • Export Citation
  • Kain, J. F.Quigley, J. M. (1970): Measuring the Value of Housing Quality. Journal of the American Statistical Association, 65(330): 532548.

    • Search Google Scholar
    • Export Citation
  • Kauko, T. (2007): A Heterodox Economic Analysis of the Housing Market Structure in Budapest Using Neural Network Classification. Journal of Real Estate Literature, 15(1): 85124.

    • Search Google Scholar
    • Export Citation
  • Kauko, T.d’Amato, M. (eds) (2009): Mass Appraisal Methods: An International Perspective for Property Valuers. Wiley-Blackwell, Oxford, United Kingdom.

    • Search Google Scholar
    • Export Citation
  • Nguyen, N.Cripps, A. (2001): Predicting Housing Value: A Comparison of Multiple Regression Analysis and Artificial Neural Networks. Journal of Real Estate Research, 22(3): 313336.

    • Search Google Scholar
    • Export Citation
  • Pagourtzi, E.Assimakopoulos, V.Hatzichristos, T.French, N. (2003): Real Estate Appraisal: A Review of Valuation Methods. Journal of Property Investment & Finance, 21(4): 383401.

    • Search Google Scholar
    • Export Citation
  • Pavlin, B. (2006): Dwelling Price Index in Slovenia – Pilot Study of Hedonic Approaches. Real Estate Price Indexes Conference, OECD–IMF Workshop, Paris, 6–7 November 2006.

    • Search Google Scholar
    • Export Citation
  • Peterson, S.Flanagan, A. B. (2009): Neural Network Hedonic Pricing Models in Mass Real Estate Appraisal. Journal of Real Estate Research, 31(2): 147164.

    • Search Google Scholar
    • Export Citation
  • Rosen, S. (1974): Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Journal of Political Economy, 82(1): 3455.

    • Search Google Scholar
    • Export Citation
  • Rossini, P. (1997): Application of Artificial Neural Networks to the Valuation of Residential Property. The Third Annual Pacific Rim Real Estate Society Conference, Palmerston North, New Zealand.

    • Search Google Scholar
    • Export Citation
  • Selim, H. (2009): Determinants of House Prices in Turkey: Hedonic Regression versus Artificial Neural Networks. Expert Systems with Applications, 36(2): 28432852.

    • Search Google Scholar
    • Export Citation
  • Tay, D. P. H.Ho, D. K. H. (1992): Artificial Intelligence and the Mass Appraisal of Residential Apartments. Journal of Property Valuation & Investment, 10(2): 525540.

    • Search Google Scholar
    • Export Citation
  • Uyeno, D.Hamilton, S. W.Biggs, A. J. G. (1993): Density of Residential Land Use and the Impact of Airport Noise. Journal of Transport Economics and Policy, 27(1): 318.

    • Search Google Scholar
    • Export Citation
  • Wang, J. Z.Wang, J. J.Zhang, Z. G.Guo, S. P. (2011): Forecasting Stock Indices with Back Propagation Neural Network. Expert Systems with Application, 38(11): 1434614355.

    • Search Google Scholar
    • Export Citation
  • Widlak, M.Tomczyk, E. (2010): Measuring Price Dynamics: Evidence from the Warsaw Housing Market. Journal of European Real Estate Research, 3(3): 203227.

    • Search Google Scholar
    • Export Citation
  • Wilson, W. (1984): Hedonic Prices in the Malting Barley Market. Western Journal of Agricultural Economics, 9(1): 2940.

  • Worzala, E. M.Lenk, M.Silva, A. (1995): An Exploration of Neural Networks and Its Application to Real Estate Valuation. Journal of Real Estate Research, 10(2): 185202.

    • Search Google Scholar
    • Export Citation

The author instruction is available in PDF.
Please, download the file from HERE.

  • Impact Factor (2019): 0.914
  • Economics and Econometrics SJR Quartile Score (2019): Q2
  • Scimago Journal Rank (2018): 0.311
  • SJR Hirsch-Index (2018): 11

Language: English

Founded in 1966
Publication: One volume of two issues annually
Publication Programme: 2020. Vol. 70.
Indexing and Abstracting Services:

  • EconLit
  • Elsevier GEO Abstracts
  • GEOBASE
  • International Bibliographies IBZ and IBR
  • JEL
  • Referativnyi Zhurnal
  • RePEc
  • SCOPUS
  • Social Science Citation Index

 

Subscribers can access the electronic version of every printed article.

Senior editors

Editor(s)-in-Chief: Prof. Dr. Mihályi, Péter

Editor(s): Ványai, Judit

Editorial Board

      Török, Ádám (Chairman)
      Berlinger, Edina
      Halmai, Péter
      Kézdi, Gábor
      Kónya, István
      Köllő, János
      Magas, István

Advisory Board

      Ǻslund, Anders
      Kolodko, Grzegorz
      Mau, Vladimir
      Messerlin, Patrick A
      Nuti, Mario Domenico
      Wagener, Hans-Jürgen

Corvinus University of Budapest
Department of Macroeconomics
Fővám tér 8, Budapest, H-1093, Hungary