Abstract
Predicting the value of real estate is a complex endeavor due to the abundance of subjective criteria. Objective consideration of the value-affecting criteria in real estate and regulation of decision support systems will enable the acquisition of more accurate results. In this study, analytic hierarchy process (AHP), a type of multi-criteria decision analysis (MCDA), is used to reproduce coefficients that serve as the basis for real estate valuation. A region in the Selcuklu district of Konya, Turkey was used to test the model created by AHP. Weighted criteria describing areas subjected to purchase/sale were generated by the AHP method and then validated. Additionally, a valuation model was created by the multiple regression analysis (MRA) method for comparison and performance analyses. Weighted values were transformed from AHP points and acquired from the MRA method and then joined with geographic information systems (GIS). Value maps of the study area and purchase/sale values were generated according to these newly created models. The performance comparison and value maps revealed that the AHP method is more successful than the MRA method. This study addressed the complexity of criteria issue by using the original hierarchical structure of AHP and thus contributes to the world economy by enabling the generation of more accurate estimations.
Highlights
Real estate valuation is the process of assessing real estate accurately and objectively through consideration of its properties in accordance with the economic conditions of the time
A total of 12 criteria describe the area’s social facilities and other parameters that affect the value of building plots
These criteria were gathered into three groups and each group was weighted using the analytic hierarchy process (AHP) method and experts’ opinions
Summary
Real estate valuation is the process of assessing real estate accurately and objectively through consideration of its properties in accordance with the economic conditions of the time. Real estate valuation represents a considerably determining factor for countries’ economic health and stability For these reasons, the value of all real estate properties should be established both effectively and efficiently (Unel & Yalpir, 2013). Real estate valuation is often considered to be a disordered, unregulated undertaking that lacks any specific legal foundation and is far from scientific or objective. This is likely due to the fact that this process is based on subjective perceptions that are not subjected to any oversight or inspection toward ensuring their consistency and equality (Yilmaz & Demir, 2011)
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