Appraisal of Apartments in Albania using Hedonic Regression

Abstract

Valuation of property is an important part of the land organization framework since it has a direct impact on people’s lives. The adjustments within the property estimation can dramatically change the abundance of the organizations and their ability for development. A variety of people may benefit from a better property valuation framework in our society because it reduces the risk of investing in this division and encourages lower interest rates on loans. The aim of this paper is to empirically demonstrate that, aside from location and address of properties, there are other major factors that influence the price of flats in Albania by developing a hedonistic pricing model. The capital city of Tirana and also Durres were selected for this research paper in order to develop a hedonic price model based on the data collected by properties sold at one of the largest real estate agencies, “Century 21” in the country. According to the findings, apartment attributes such as area of living, number of bedrooms and other factors influence the price. The findings also revealed the marginal influence of the number of apartment spaces, which was dependent on the living area of the apartment. This is the first empirical study to present the results obtained from a hedonic regression built using data pertaining to Albania.