Assessing the value of user-generated images of urban surroundings for house price estimation

Abstract

Determinants of housing prices are particularly significant for monitoring and understanding housing prices. Traditional variables are measured through official statistics or questionnaire surveys, which are labour intensive and time-consuming. New forms of data, such as point of interest or street view imagery, have been used to extract housing location and neighbourhood features, but they cannot capture how different individuals recognised and evaluated the properties nearby, which may also be relevant in the house price estimation. Therefore, this study investigates whether user-generated images may be used to monitor and understand housing prices and how they influence real estate values. Within this context, perceived scenes features are extracted and quantified to blend with commonly used determinants of housing prices. Two machine learning algorithms, random forest and gradient boosting machines, are utilised and deployed for integration with a typical housing price modelling-hedonic price model. By comparing the performance and interpretability of different models, the relative importance of features and how they influence the estimation power of the models is visualised and analysed. The findings suggest that random forest predictions perform the best and are interpretable, with geotagged Flickr images adding 4.6% to the model’s accuracy (R2) from 61.9% to 66.5%. Although user-generated images increase minor value in house price estimation, they may be used as a supplementary data source to capture perception features for house price estimation. This could help the restructuring and optimisation of residential areas in future regional construction, planning and development.