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Real Estate valuation and forecasting in non-homogeneous markets: A case study in Greece during the financial crisis

Alexandridis, Antonis, Karlis, Dimitrios, Papastamos, Dimitrios, Andritsos, Dimitrios (2019) Real Estate valuation and forecasting in non-homogeneous markets: A case study in Greece during the financial crisis. Journal of the Operational Research Society, 70 (10). pp. 1769-1783. ISSN 0160-5682. (doi:10.1080/01605682.2018.1468864) (KAR id:66824)


In this paper we develop an automatic valuation model for property valuation using a large database of historical prices from Greece. The Greek property market is an inefficient, nonhomogeneous market, still at its infancy and governed by lack of information. As a result modelling the Greek real estate market is a very interesting and challenging problem. The available data cover a wide range of properties across time and include the financial crisis period in Greece which led to tremendous changes in the dynamics of the real estate market. We formulate and compare linear and non-linear models based on regression, hedonic equations and artificial neural networks. The forecasting ability of each method is evaluated out-of-sample. Special care is given on measuring the success of the forecasts but also on identifying the property characteristics that lead to large forecasting errors. Finally, by examining the strengths and the performance of each method we apply a combined forecasting rule to improve forecasting accuracy. Our results indicate that the proposed methodology constitutes an accurate tool for property valuation in a non-homogeneous, newly developed market.

Item Type: Article
DOI/Identification number: 10.1080/01605682.2018.1468864
Uncontrolled keywords: Forecasting, property valuation, real estate, neural networks
Subjects: H Social Sciences > HG Finance
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Antonis Alexandridis
Date Deposited: 24 Apr 2018 08:12 UTC
Last Modified: 09 Dec 2022 01:40 UTC
Resource URI: (The current URI for this page, for reference purposes)

University of Kent Author Information

Alexandridis, Antonis.

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