Real estate valuation using sales comparison method and multiple regression analysis on the example of Russia

Valuation method using multiple regression analysis is widely used across the globe and is seldom used in Russia. The aim of present study is to find the advantages and disadvantages of using Multiple Regression Analysis (MRA) in valuation compared to the application of traditional approach of sales comparison. The procedure of application of MRA involves identifying and listing the factors that influence the value of a house. It is done through literature review of previous researches, published articles, questionnaire survey and interviews of experts in the field. From these attributes, critical house value influencing factors are chosen after thorough statistical analysis of questionnaire survey. In total, samples of fifty three valuation reports have been used & regression has been carried out. The advantage of using MRA method is that it can model the relationship between sale price of a house and housing attributes. MRA regresses each attribute to show how change in each attribute affects the house price. Results obtained from sales comparison method & multiple regression analysis show that, regression gives better accuracy & efficiency in predicting value of property as compared with the traditional approach.