An Analysis of Implicit Value of Property Characteristics in Residential Property Prices using a Hedonic Value Approach

Abstract

Residential property prices increase every year without an equivalent increase in people's purchasing power. To suppress these price fluctuations, the government has implemented the land banking concept, for which quantitative knowledge about factors affecting property prices could optimize its implementation. Therefore, this study aims to identify the implicit value and influence of public facilities and landscapes located around residential properties. The implicit value can be identified by taking a hedonic value approach, which is used to estimate the value of residential properties by considering the distance to public facilities and landscapes in Jakarta. The regression methods used are multiple linear regression (MLR), quantile regression (QR), and support vector regression (SVR). This study found that MLR offered the best accuracy (R 2 = 0.798), followed by QR (R 2 = 0.687), and SVR (R 2 = 0.563). The study also found that the proximity of residential properties to Mass Rapid Transit (MRT) stations, green open spaces, reservoir lakes, health service facilities, vocational schools, marketplaces, high schools, and mosques has a significant influence on residential property prices, with MRT stations, health service facilities, marketplaces, and high schools conveying the largest implicit value.