A Property valuation model to identify thriving real estate opportunities, based on spatial factors

Abstract

Traditional valuation techniques are used to evaluate the value of a property in most developing countries, despite the fact that the world is expanding with new technical developments in every discipline, including spatial science. Traditional techniques are primarily biased on physical and economic variables, but not on spatial variables. As a result, the purpose of this study is to investigate the gap in practice in advanced valuation approaches that can grasp the impact of spatial (geographical) variables on a property's value. In order to experiment it, a valuation model using the Geographical Information System has been created for an urban local area that generates the spatial heterogeneity of property values. Also, a coefficient of correlation analysis was carried out to identify relationship strengths with the property’s value. Results indicated that in the case study area, the strongest impact on property value is from the spatial variables of distance to main city, distance to major “A” class road and breadth of access road in order. Further, a multi linear regression equation has been derived to generate an estimation of each plot’s property assessed value. Ultimately this model could serve as a guidance tool for any real estate party to estimate property values based on spatial variables.