Effect of Private and Common Areas on Transaction Price for Collective Housing

Abstract

The utility of a private area in a residential building (collective housing) is higher than that of a common or shared area; thus, the price of private areas should be higher than that of common areas. However, in sales transactions, both areas are included in the price borne by the purchaser. The scope of this study was 22 residential buildings near Zhongke Shopping Plaza, Xitun District, Taichung City, and data for 2,500 transactions were analyzed. The study employed hierarchical linear models, with residential unit price as the dependent variable and private and common areas as independent variables, to explore the extent to which these types of area affect the transaction price, and the effect of each area type on the housing price was clarified. In different models, the results indicate that common and private areas have varying degrees of influence on the housing price; however, the influence of common areas is greater than that of private areas. This finding subverts traditional concepts and previous results.

The Influence of Public Facilities on the Transaction Price of Multi-Family Residential in Xitun District

“…In the real estate transaction, the private area is the most important component [13]. It is the main living space of the household [13]. This study expects that private area has a positive and significant influence on residential price.…”

“…The public area of multi-family residential does not include the area of parking spaces, and is a space shared by residents [13]. The purpose of the installation is mostly to improve the comfort of the residents; the larger the public area, the more shared facilities that can be enjoyed by residents [13].…”

“…The private area includes the area of the main building and the auxiliary building. In the real estate transaction, the private area is the most important component [13]. It is the main living space of the household [13].…”

“…In the process of data analysis, the general linear model (GLM) is only suitable for the discussion of the relationship between variables at a single level, and contains only one error term. If the data structure is nested and can be divided into individual-level and group-level, it must be analyzed through a hierarchical linear model [13,14].…”