Summary
This paper applies hedonic pricing models in a sample of 1,860 residences launched in 2005, situated in districts of low, middle and high income of the São Paulo Metropolitan Area. Using Box-Cox transformations applied at stage two of Rosen's equations, the model identifies attributes that influence supply and demand real estate conditions and compares the relative importance of each of these attributes whenever there are changes in social classes. Based on this analysis, we conclude that an understanding of consumers and players behaviors relative to real estate attributes can improve strategies for each kind of real estate.
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Extract
Supply and Demand Determinants: An Empirical Study of Residential Properties in São Paulo, Brazil
The urban transformations that have been occurring in the Säo Paulo Metropolitan Area, especially in the last 20 years, have been often observed and documented. Those who live a long way away from work or from school face a number of difficulties to cross the city; the traffic jams in the streets and building garages, the rising number of places with the same appearance, the alternative uses of industrial warehouses, the proliferation of security guard booths that block passageways and control access to residential complexes, and the sudden verticality of streets and districts that were formerly distributed horizontally. In addition they have to deal with highways that look like avenues due to a huge increase in the flow of vehicles, and avenues that acquire speed control equipment to keep them from becoming highways. All of these characteristics point to new types of occupation and social, spatial and temporal journeys within the metropolitan territory, which increasingly has taken on a dual behavior, as one can clearly identify modern, functional and structured aspects of urban occupation as well as precarious ones. (Meyer, Grostein & Biderman, 2004).
Thus, the population, including the potential consumers of the services, has a differentiating perception of the many possibilities...See the full content of this document
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