Hedonic pricing in property sales and property rent

Abstract

This study applies the hedonic pricing model to Property Sales and Property Rent and the aim is to investigate whether the Property Sales and Property Rent are affected by different factors. Two log forms of hedonic pricing models, with the same set of independent variables, are applied to Property Sales and Property Rent. The quantitative variables in our dataset are “Gross Area” and “Building Age” of a property and the dummy variables are defined to represent different qualitative attributes of the property in order to test if the attributes are considered as significant factors of Sales and Rent. In conclusion, the positive common factors are “Gross Area”, “Sea View” and “MTR/KCR”. The three negative common factors are “Building Age”, “No. of Flats in the Building” and “No. of Bus/Minibus Routes”. On the other hand, the positive specific factor, for Sales is “High Level of Floor”, while the two positive specific factors for Rent are “South Direction” and “No. of Band 1 Schools” in the district of the property.