The construction of real estate price index: modelling by incorporating spatial elements
Housing plays an important role in the economics of developed countries. It is a major source of value and of risk to household and banking system sector. Of these reason, most countries develop a House Price Index (HPI) in order for them to monitor the house price changes from a period to another....
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://eprints.uthm.edu.my/5807/ http://eprints.uthm.edu.my/5807/1/6._Norshazwani_Afiqah_Rosmera.pdf |
| Summary: | Housing plays an important role in the economics of developed countries. It is a major source of value and of risk to household and banking system sector. Of these reason, most countries develop a House Price Index (HPI) in order for them to monitor the house price changes from a period to another. In Malaysia, a HPI known as Malaysian House Price Index (MHPI) is constructed. The MHPI is the only available HPI which makes it as the only reference in monitoring the house price changes. The purpose of this study is to construct a HPI with the focus to incorporate spatial elements. Based on the hedonic price modelling, three Hypothetical HPI (HHPI) are constructed. Each HHPI composed of different spatial elements used as variable. Spatial elements included in this study are sub-districts dummy, distance of house to city centre and coordinate (x,y) of house. Results show that the inclusion of house coordinate helps to explain the exact location of houses and smoothen the movement of HPI. This study revealed the significance of considering house coordinate in estimating the house prices, hence producing an accurate HPI. |
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