House price estimation using multiple regression analysis approach for mass appraisal model in Kaduna North, Nigeria

Abstract

House is shelter to support a household living and basic needs for all humanity. Owning a house is a means of life which everybody is pursuing with. House price is the key major concern to make decision for owning a house. House price also has been used as a basis for property taxation. The accuracy of valuation exercise is very important to real estate profession and other market players. However, the traditional method of valuation contributes to the inconsistency, subjectivity of assessed value because location factors are not considered objectivity, there are also errors involved. The purpose of this research is to apply MRA model in estimating house price for mass appraisal in Kaduna north, Nigeria. Two basic micro determinant of house price were considered namely structural attributes and location of property. Using a sample of 106 house sale transaction data which were recorded between 2011 to 2015. MRA was used to determine the structural variables and locational that has statistically influence on the house price. It was established that among the variables included in the MRA six (6) were significant except number of bedroom, number of living room, type of ceiling, condition the house. The significant variables were year of transaction, type of house, availability of swimming pool, availability of security post, type of door and location of the property. Using these significant variables a mass appraisal model was developed for the study area. The performance of the model was evaluated using the ratio study method and the model was found to be satisfactory. It was recommended that, this model be used in mass appraisal of residential properties in Kaduna north in the future, with a view to improve accuracy, objectivity, efficiency, and fairness of the property taxation system, which will lead to generating more revenue for the government which will encourage physical infrastructural development in Kaduna North.