HEDONIC REGRESSION ANALYSIS IN DETERMINING THE EFFECT OF GREEN ON HIGH RISE RESIDENTIAL

Abstract

In predicting house price, there are many influential variables, and each variable is identified as a price determinant. Theoretically, variables are divided into categories, namely locational and neighbourhood attribute, structural attribute, time attribute, and environment attribute. Green element is one of the attributes as describe under environment category. The attribute is important as other variables which significantly explained how people willing to pay intangible variable. The relationship between property price and attribute needs to be examined to understand the influence of the green element on property price. Thus, this research attempts to demonstrate the independent variables correlated to the house price, including the green variable, by using hedonic regression analysis. Hedonic regression analysis is a well-known approach in determining the relationship between two or more variables. Green element represents the green-rated obtained by the housing scheme as evidence that the building possesses sustainable characteristics. The cost of green is relatively high than a conventional building. A dataset of 934 house price transactions with 14 variables was analysed. From the analysis, it is concluded that green has a significant effect on the house price. The result was interpreted by the β coefficient of 0.065 explained in hedonic regression analysis. It signifies that green can add premium to the house price. House price results from multiple determinants represented by house attributes and the findings confirm that one of the environment attributes do give effect on the house price in Malaysia property market.