Hedonic Modelling of Real Estate Prices in Varna

Abstract

The purpose of the research is to model the real estate prices in the city of Varna through hedonic regression. The sample size of the study is 118 apartments that are on the residential market in “Chaika” living estate in the city of Varna, published online on “ALO.bg” as of October 31, 2023. This study is an attempt to reveal the attributes that determined the value of the properties. In other words, the hedonic pricing model can be used to identify factors that can explain the formation of apartment prices in Varna and for predictions. The attributes of the apartments considered in this study are size, floor, number of rooms, location, age, elevator, parking space or garage, type of building, furniture, and type of construction. The fitted model based on the collected data presents the major factors that determined the apartment prices in the city Varna, and the estimators of their slope coefficients are called "attribute prices". It was found that the results of the study explain 82% of the total variation in the model, emphasizing the most important factors, and only 18% of the total variation was due to other factors not included in the model.