About MRA

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Concept of MRA

Concept

  • Statistic-based computer programs.​​

Objective

  • Statistic-based computer programs.​​​
  • Use property information (e.g. transactions and property attributes etc.) to generate suggested value.
  • Produces a market valuation through mathematical modelling.

Equation

  • Statistic-based computer programs.​​​

Multiple Regression Analysis (MRA)​

Multiple regression analysis is a significant technique used for predicting the unknown value of a dependent variable (y) from the known value of two or more independent variables (x).​​

Multiple Regression Analysis (MRA)​

  • ​Applied technique of statistical analysis and modelling​.​​
  • Understand the relationship between variables​.
  • Statistical technique to predict the value of one variable based on another variable​Uses several explanatory variables
  • Measure of how strongly one variable influence the other variable​
  • Shows the nature of relationship between variables
  • Calculate the variance in the dependent variable​
  • Helps in establishing the functional relationship between two or more variable​​​

Performance evaluation and measurement of each model​

AVMs in the real estate sector are algorithms (basically a combination of Machine Learning techniques) that are trained on large amounts of data such as transaction data and land property attribute in order to predict the values of properties.

AVM-

  • ​Statistic-based computer programs.​​
  • Use property information (e.g. transactions and property attributes etc.) to generate suggested value.
  • Produces a market valuation through mathematical modelling.​
  • Variety of statistical and algorithmic approaches​​​​
  • Analyzing the relationship between the price/value of a residential property and the property’s underlying attributes.
  • Application of statistical methods and Mathematical Modelling such as multiple regression analysis (MRA)​​​

MRA​

Challenges-

  • ​Identify the attributes responsible for value of a property​​​
  • The scarcity of correct transaction data​
  • Identity the source of all these attributes​​
  • Discover methods to quantify and digitize these attributes
  • Identify verified sources of transaction or quotation data​
  • Develop model to test AVM
  • Develop prediction

MRA

Benefit-

  • ​Confidence in the accuracy of the result​​​
  • Less human intervention post-initiation​
  • Risk Analyzing Tool​​
  • Supporting tool in decision making system​
  • Provide sufficient statistical output​
  • Convenient, fast and low-cost alternative to a full valuation​​​​​