ANALYSIS OF DIFFERENT APPROACHES TO REAL ESTATE APPRAISAL

The traditional valuation of real estate in the field of civil engineering did not include the uncertainty of human behaviour, which cannot be explained by the traditional approach. There are different valuation methods for real estate appraisal, which are basically classified into three groups as a classic, statistical and advanced. In this article, we estimated the different housing price models using the sample of 37 residential apartments in Riga, Latvia, October 2018. In order to evaluate if there is a possible association between the variables involved in relation to the property price, the analytical data were analysed by correlation analysis, analysis of variance (ANOVA), regression analysis, covariance analysis (ANCOVA), principal component analysis (PCA) and cluster analysis. The models estimation results show that using ANCOVA models for the prices forecasting the model fitting to data is less than 58%. The preliminary results of this study suggest that the estimated properties can be distributed in 4 groups, depending on number of rooms, area and age. In addition, the decision tree was created based on algorithms (J48) and a preliminary definition of the best rules was made. The decision tree presents an accuracy of 84% with 31 accepted instances for a total of 37 currently classified instances.