The Determinants of Real Estate Pricing in Turkey - A Hedonic Pricing Model Application


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Akay A. , Karadağ H.

22nd Eurasia Business and Economics Society Conference, Rome, Italy, 24 - 26 May 2017, pp.122

  • Publication Type: Conference Paper / Summary Text
  • City: Rome
  • Country: Italy
  • Page Numbers: pp.122

Abstract

The real estate pricing is a topic of concern in different disciplines, but it is the macro economy most of the studies are conducted in. Among such studies, hedonic pricing and hedonic regression models in valuing and anticipating the tendencies in real estate pricing have become often utilized tools thanks to their proven high explanatory capacity in understanding the changes in prices. Following this, this study aims to examine the determinants of real estate pricing – particularly the pricing of houses – via employing hedonic pricing approach and hedonic regression models. In identifying the determinants of such pricing, the paper uses Turkey as a case study – a developing country failing to offer a well-defined systematic identification. The lack of fixed determinants in real estate pricing results in the appliance of different and even contradictory model or solutions by agencies involving in pricing in the country such as local governments (in taxation), banks (in granting loans) or insurance companies etc. Therefore, the need for a model with consistent determinants in identifying the price of real estates, houses in this case, is self-evident. Sample data used in this paper is gathered from the most leading real estate web sites in Turkey with several specifications such as price, flat number, size, number of bath, number of room, parking facilities, and including the geographical location especially to examine the effects of spatial factors such as distance to facilities such hospitals, schools, recreation places or malls etc.