Housing Heterogeneity Dimensions and Their Elements: a Systemic Approach

Abstract

Housing market participants constantly face the housing heterogeneity - the technical and socio-economic differences of dwellings in a certain populated area. Housing heterogeneity often complicates the managerial decision making related to housing transactions, identification and objective evaluation of the quantitative and qualitative aspects of transactions. Housing heterogeneity is an objective phenomenon that implies housing uniqueness - housing distinguishing characteristics divided into specific and interconnected groups within the framework of the research. Most of these differences can be noticed by each market participant, but some of them can be identified only by experienced and professionally trained market participants. Theory and practice have demonstrated that the constituent groups of heterogeneity influence each other and take part in the formation of market value and transaction price of housing units. The increased housing construction intensity, the continuous modernisation of construction technologies and the diversification of building materials used in housing construction, as well as restriction of the building plot of land change the quantitative and qualitative aspects of heterogeneity dimensions. This poses considerable challenges to market participants in the managerial decision making process related to housing transactions. Research results demonstrate that the socio-economic elements of housing heterogeneity are constantly changing under the influence of the dominating factors of the external and internal environment. Therefore, nowadays, housing heterogeneity has become a major cause of information asymmetry, which means that heterogeneity is inherent in the formation of socio-economic market barriers in the housing market.

A Property valuation model to identify thriving real estate opportunities, based on spatial factors

“…It can be differed according to (1) Property Type, (2) Land Plot Size, (3) Gross/Net Floor Area, (4) No of Rooms/ No of Bathrooms, (5) Architectural Design / Usable Layout, etc. (Vanags et al, 2017;Oud, 2017;Santos et al, 2020;Fregonara et al, 2012). Also the economic conditions such as (1) Interest Rates, (2) Economic Indicators such as GDP, GNI, Lending Rates, and (3) Government Laws & Policies etc will also affect property value as it impacts on a person's capability to buy a house.…”

“…"Housing heterogeneity" is a relatively recent idea in real estate economics where concepts such as "housing uniqueness," are frequently employed to explain price disparities of externally comparable housing units (Vanags et al, 2017). "Physical Heterogeneity" explains the price differences in housing units due to its individuality of the physical structure.…”