Short review on factors influencing real estate and hedonic pricing module

Abstract

Population urbanisation is the narrow measurement for urbanisation level. By identifying the connections among industrialisation, urbanisation and population migration, this paper reveals that industrialisation is an essential cause for urbanisation and population migration, followed by expanding requirement of accommodation, which generated the motivation for real estate development. Thus, the real estate development is the result of urbanisation. Higher urbanisation level usually lead to higher real estate price based on the supply and demand relationships in marketing theory. Besides the macro factors stimulating real estate price, this paper reviewed several micro factors studied by previous researchers like location or accessibility, external and internal facilities. Location is normally calculated by distance to the city centre or other facilities. Broadly used for evaluating and predicting real estate pricing since 1980s, hedonic module is a multiple linear regression module especially used for exploring the effectiveness of various factors influence on real estate price. This paper reviewed several researches used hedonic pricing module and the variables used to measure that influence. With the comparison of artificial neural network, this paper summarised the comments from other scholars for hedonic, contrasting the advantage and disadvantage of hedonic method.