Stuctural, spatial and other attributes of house price: The case of Bangladesh

This paper examines the significance of structural and spatial characterstics of house contributing to the property value. Longitudinal data on property value over the last ten years and cross-sectional data on house rent have been analysed using Hedonic Regressions Function to derive a house price index for the current housing market in Bangladesh. The trend of house price is increasing more rapidly with the demand driven housing market in Bangladesh. Real estate attracts a great deal of speculative investment, but there is no indication of the relative importance of various factors in this process. This paper hopes to make an initial dent into this problem. Introduction Housing market of Bangladesh is booming over the last few decades to feed the growing demand by bourgeoisies, particularly, in the urban areas. Though the market is primarily dominated by the private realtors, the government housing authorities also keep impetus in this process. The increasing migration toward urban areas for availing better livelihood facilities coupled with the scarcity of urban land have made the housing demand skyrocketing. As such, houses are now being split into flats to accomodate the influx of city dwellers who having less purchasing power. Still the supply is far behind the level to meet the current demand which is causing less control over the exponential increase of market price. However, various physical and non-physical attributes determine the house price and make difference between in-house prices across the city. All changes across the area are not completely explicit, as such, to estimate the values of that changes always be complex since a number of factors and their multiple effects contribute to these changes. Many approaches and methods have been employed by far to measure the costs for marginal changes. Thus, in-house and outdoor factors need to be looked into carefully. A good house price index allows buyers and sellers to estimate the current value of houses.