Study On The Perfection Of Evaluating Real Estate With Hedonic Pricing Model

As the Chinese real estate market has become mature gradually, the real estatetransactions are becoming more and more frequent, and the upcoming levy of real estate taxin nationwide, evaluation of the regional property becomes increasingly important. Themainland of China evaluate the real estate commonly using three kinds of basic valuationmethods: cost method, comparative method and income method. However, these threemethods because of the replication is not enough, often cannot show their advantages on realestate evaluation. The study argues that the Hedonic price model not only can make up somedisadvantages of basic valuation methods evaluating single job, but also have advantages inmultitudinous real estate’s evaluations. Through comparative analysis of Hedonic price modelused in mainland and overseas, find the common defects in the traditional model used inChina, and also found that the traditional model often ignores many macroeconomic factorson real estate prices and ignore the influence of macroeconomic factors such as populationattributes, degree of regional economic development will affect building its owncharacteristics. When it comes to this kind of problem, use the sheer level of traditional modelcarries on the analysis of conclusion will there is a big error, so from the aspects ofmathematical model selection, also to have certain experience to draw reference in China.This study is intended to use hedonic price model make up the defects of traditionalmodel in multitudinous real estate’s evaluations. However hedonic price model itself hasdefects, so in this study, through comparison and case studies, summarize some lessons themainland should draw in using hedonic price model to evaluate the real estate and keepperfecting our country price using hedonic price model.In this study, stating with the theoretical basis of Hedonic Pricing Model, has discoursedclearly about the basis, the assumption, algebraic models of Hedonic Pricing Model. Thendetermined the necessity and feasibility of using Hedonic Pricing Model to evaluate the realestate prices by analyzing the strengths and weaknesses of three traditional evaluationmethods. Moreover, comparing the cases of mainland and overseas, the differences of theirmodels indicate the traditional Hedonic Pricing Model has some disadvantages andimperfections, according which, this study gives some suggestions and some macro factorswhich should be paid attention to when using the Hedonic Pricing Model in domestic.