ABSTRACT The real estate appraisal or land pricing has an increasing importance due to strong growth of the real estate market in Vietnam in the last years. In that respect, a permanent preoccupation for specialists is to find newer and better methods to evaluate the real estates. In the international practice, using new approach of appraisal methods is statistical and econometric models. The main aim of the paper is to establish and propose an applied multiple linear regression model based on the factors can affect the price of land in Tien Du District.
The study areas covered by the statistical appraisal are selected from geographical localities, categories or subjects to property taxes. Key words: real estate appraisal, land pricing, multiple linear regression model 0 ACKNOWLEDGEMENT After an intensive period of three months, today is the day: writing this note of thanks is the finishing touch on my thesis to the people who have supported and helped me so much throughout this period. I would first like to show my gratitude to respected supervisor Dr. Le Dinh Hai from Faculty of Economics and Business Management, Vietnam National University of Forestry for his continuous support, patient guidance and enthusiastic encouragement during this research.
I want to thank you for Prof. Lee McDonald, Department of Ecosystem Science and Sustainability, Colorado State University for his valuable and constructive suggestions during the planting of this research work. In addition, I would love to thank various people for their contribution to this project; Special thanks to local people in Tien Du district for providing me helpful information in this study. Finally, I own my gratefully thank to my parents, my friends for their wise counsel and sympathetic ear.
You always there for me. 1 TABLE OF CONTENT ABSTRACT ACKNOWLEDGEMENT LIST OF FIGURES LIST OF TABLES CHAPTER 1. STUDY GOALS AND OBJECTIVES. STUDY AREA AND RESEARCH METHODOLOGY.
Bac Ninh Province.2 Tien Du District. The theory of hedonic and multiple linear regression method. Framework of factors influencing factors the price of land in market. Data collection method:.
Data analysis method:. Descriptive statistic quantitative variables on surveyed in Tien Du District. Descriptive statistic qualitative variables on land price survey in Tien Du District .1 Basing on the R- square statistic to evaluate the suitability of model .2 Analyzing ANOVA variance to evaluate the extinction of model. Independent sample test (F-test/ Levene’s test).
The result of Linear Multiple Regression.1 Evaluating the independent of variables………………………………………………31 4.2 Checking the defect of model………………………………………………………….3 The contribution of independent variables into model…………………………………32 4.4 Evaluating marginal influence…………………………………………………………. The evaluating the reality of regression. The solutions for achieving applying multiple linear regression in Tien Du district. Solution based on building land pricing system.
Solution based on building data source. Solution based on knowledge on multiple linear regression model on land pricing of appraisers. 37 CHAPTER 6: CONCLUSION CHAPTER 7: REFERENCES CHAPTER 8: APPENDICES 3 LIST OF FIGURES Figure 3. The map of Bac Ninh province.
The map of Tien Du District, Bac Ninh province .4: Factors influences the price of land .1 Regression standardized residual………………………………………………….3 Scatterplot…………………………………………………………………………32 4 LIST OF TABLES Table 3.1: Sampling design in Tien Du district.1: Codebook of questionnaire items .2: Description of quantitative variables. Description of qualitative variables.4 Multiple linear regression Model summary output. Multiple linear regression ANOVA output. Correlation between factors and land price.
Result of independent Samples Test for the social infrastructure affects to land price. Result of independent Samples Test for the location affects to land price. Result of independent Sample Test for the security affects to land price. Result of independent Sample Test for the shape affects to land price.
Coefficient table of multiple linear regression. The contribution of independent variables………………………………………. INTRODUCTION Land is one of our most precious assets. It encompasses surface, space, soil, provision of food and water which not only provide special energy for the living on Earth but also create a basis for urban and industrial development by constructing economic, cultural, society, security and defense (Verheye 2007).
This resource is fixed in position and limited in area. It can’t be increased or lost itself. Therefore, land is an irreplaceable resource. In traditional societies it is a common good and cannot be alienated nor sold.
However, in a modern free market system, because of the overpopulation growth and the development of economic society, the demand of using land become bigger and more necessary than ever leading to land is a commodity that is desired and can be exchanged. The exchanging of land associated with property. It is also called earnings of land. The difference value between land in rural and urban environment is very clear.
In a rural environment land is primarily a basis for crop production and a source for food supply in general. It provides space for living, construction and the development of a variety of social activities so land has thus a production value; it is a primary commodity and a commercial asset. While in an urban or suburban environment the expected earnings are mainly linked to the type and nature of buildings that can be constructed on the land, and the services that can be generated from them: business, commerce, residential, public services, etc. With the development of population also the industrialization, people need more land to produce food, construct infrastructure, etc.
Land is sold and exchanged basing on the valuation of them. This is created the real estate market. In this market, price of land is “the value of ownership of stipulated rights in perpetuity, and equal to the estimated present value of the expected future appropriations of rents. It is however also affected by uncertainties about net rent, interest rates and inflation.
In other words, the value of land depends as well as 1 on the evolution of rents (Dunkerley 1983). From determining the price of land, land pricing activities occur. Land pricing is considered as one of important fields in economy. According to land pricing result, the government and the people who use land, will have the right decisions in management, business and civil transactions.
Land pricing is the foundation which is serviced for buying and selling, exchanging and transferring land. It is also the basis for some policies about compensation of land when the government collects land and calculates the property. From that, Land pricing not only does stabilize the land market but also contributes in ensuring the fairness in society, especially in dissolving the conflict about building and implementation of the land laws. Alternatively, nowadays, the price of land in market significantly changes year by year leading to the land pricing activities meet a lot of difficulties.
In some developed and developing countries in the world, especially Western countries such as the UK, Sweden, etc. with the development in clearly tasks about real estate of agencies that have detail valuations land price from the central to local levels and train large of scientific or professional staff in specialized universities. They recovered this problem and made the land pricing is established consistently and develop fast by estimating property value in a specific way. Mass appraisal (It incorporates mathematical and statistical techniques and at present) has been developing since 1970s by determining all the factors such as location, security, surrounding, etc., from that , evaluate how them can affect to price of land.
To analyze the factors of influence to the real estate value, hedonic theory (or the real estate valuation theory) are applied primarily. As a technique multiple regression method mostly was used in mass appraisal. This made the land market has high exclusiveness because it provides precise property information for appraisers and clients (BOŽIĆ, MILIĆEVIĆ et al. 2013), and creates the foundation for the developing of economy and absolutism while this field has still been new in Vietnam.
2 Vietnam saw the significant difference between land price from government and land price from real market. The price of land in real market is not recorded in exact paper. In land contract which is collected by the governors, the people make value of real estate equal 1/10 the value that they make a deal. This lose the tax contributing for the country.
In addition to, the lack of the unity between two prices causes the people who is revoked land by the officials don’t reach the agreement on price compensation for land users when land acquisition, site clearance and relocation. This make a lot of shortcomings in managing and using land. Therefore, dealing with the limitations, building the table for land price is necessary with determining factors and how they affect to price of land according to suitable way is necessary. Tien Du Commune, Bac Ninh Province is on the way to integrate and develop.
On recent years, the social- economic activities also the projects relating to them become more diverse and abundant. Especially, the development of infrastructure that puts more pressure on land. The land is used more and more and its price is fluctuated leading the problems related to the disparity in land price between the government and reality. Therefore, the determining the factors which affects to the price of land by using multiple linear regression (which based on the hedonic method) to build efficient assorted- land price bracket is the important thing to reduce this difference .This also is useful for regulating the land market.
Although, the determination of factors affecting the price of land is necessary, until now, there has no specific research about it for predicting land price in Tien Du district, Bac Ninh Province. With the purpose is application land price method into practicality, I have chosen “Applying Multiple Linear Regression for predicting land price in Tien Du District, Bac Ninh Province” to be my research. STUDY GOALS AND OBJECTIVES 2.1 Goal Applying Multiple Linear Regression Model to predict the land price in Tien Du District, Bac Ninh Province.2 Specific Objectives To analysis the different factors which affect to price of land in Tien Du District, Bac Ninh Province. To find out how impact of factors on determining price of land in Tien Du District, Bac Ninh Province.
To build Multiple Linear Regression model for predicting land price in Tien Du District, Bac Ninh Province 4 CHAPTER 3. STUDY AREA AND RESEARCH METHODOLOGY 3. Bac Ninh Province The area of Bac Ninh province is the smallest in Vietnam with 822,7km² (GSO, 2014). However, the province has population density (1,375 persons / km²) classed 3 out of 64 provinces and cities in country.
It is the second highest province’s population density just only lower than population density of Ha Noi and Ho Chi Minh City and is higher 5 times compared with the average population density of the country (274 people / km²). This significantly affected to meet the needs of land use of 1.1312 million people (GSO, 2014) inside the province. Located in the North of Vietnam. It borders the Hanoi City to the west and southwest, Bac Giang province to the north and east, Hai Duong province to the southeast and Hung Yen province on the south.
Bac Ninh is one of 13 provinces of Minh Mang King, was first established in Bac Ky in 1831. It also is a province in the north of the Red River delta where existed the beauty of the traditional villages and folks through hundreds of years. The topography is relatively flat with the dense network rivers from 1. Therefore, mostly slope direction is from north to south and from west to east, is expressed through surface water runoff poured on Cau, Duong and Thai Binh River.
The topography not only affects to the slope direction but also results in the climate of this province is representative for tropical monsoon, with distance reasons and pretty cold and less rain in winter but hot and rainy in summer. The annual temperature varies between 17.