Modelling and Simulation of Selected Real Estate Market Spatial Phenomena

Abstract

This paper presents a novel approach to the modelling and simulation of real estate transactions. The main purpose of the study was to develop the theoretical foundations for building simulation models of transaction locations and real estate prices. Pursuing this objective involved a spatial market analysis based on geostatistics to develop maps of the dynamics and spatial activity of the real estate market. The research was conducted by presenting the issue against the background of the literature of the subject and by conducting an experiment, which involved developing an original procedure of providing simulated market data. The study deals with the market for non-built-up land real estate with a residential function in the city of Olsztyn (Poland). The time range concerned the years 2004–2015. Information on 932 real estate transactions was adopted for the study. A set of additional information on virtual transactions was generated during the study; this information can supplement market data for markets of low activity or if there are information gaps. Geoinformation analyses were performed in order to determine new trends in price levels and spatial activity of a real estate market. Overall, this resulted in generating maps of simulated transaction densities, a map of simulated prices and a map of the probability of a specific price occurring.