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The fundamental determinants of real estate prices: a study for Brazil

Author

Listed:
  • Guilherme Moreira da Costa Lopes

    (Ibmec)

  • Ari Francisco de Araujo Junior

    (Ibmec)

  • Luiz Carlos Day Gama

    (Ibmec)

Abstract

This study aims to analyze the main determinants of housing prices in Brazil. Considering that real estate are very heterogenic different methodologies were adopted in order to analyze the residential real estate market, both from a macro and micro perspective. In the first approach, models by pooled OLS, fixed effects and random effects were estimated in order to test the impact of important eco-nomic indicators in the country, such as: the Selic rate, unemployment and in-come. Among the results found, a price elasticity of 0.259 in relation to income was estimated. In the second approach, hedonic models that allow capturing the effect of the characteristics of the residences and their location on the property prices were estimated, for the city of Belo Horizonte. Among the results found, it is noteworthy that infrastructure has a positive impact on the price of real estate.

Suggested Citation

  • Guilherme Moreira da Costa Lopes & Ari Francisco de Araujo Junior & Luiz Carlos Day Gama, 2023. "The fundamental determinants of real estate prices: a study for Brazil," Revista de Economia Mackenzie (REM), Mackenzie Presbyterian University, Social and Applied Sciences Center, vol. 20(1), pages 173-202, january-j.
    • Handle: RePEc:aft:journl:v:20:1:2023:jan:jun:p:173-202
    DOI: 10.5935/1808-2785/rem.v20n1p.173-202
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    More about this item

    Keywords

    Brazil; property prices; hedonic prices; panel data; real estate market.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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