The Role of Brokers on Determination of Residential Real Estate Price in Addis Ababa
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Date
2020-12
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Addis Ababa university
Abstract
The purpose of this paper is to probe the role of brokers on residential real-estate price escalation in
Addis Ababa. Real estate housing market is one of mechanisms that transfer ownership rights of a house
with a combination of different attributes that is defined by its prices. The process and procedure in Real
estate housing market is complex both for the sellers or buyers. Market participants lack sufficient
information to undertake transactions. The paper tries to examine the influencing factors of the Real
estate housing market and show how brokers facilitate the market. The price of the real estate house is
not determined arbitrarily. The implicit price of residential housing characteristics concerning the
physical and location of Addis Ababa are examined in this paper. The elements of sales comparison of
residential real estate house depend on a package of attributes that· are, valued by the consumers. A
model that incorporate for the quality of the house, age, area, number of rooms, neighborhood
availability of such as market, elementary school etc. are presented and discussed. Hedonic price model
is used to estimate the most important determinant factors. Data is collected from households' that buy
residential Real estate houses in Addis Ababa. The data collected were analyzed using the multiple
linear regression models. The result of the study suggested that the price of a house has increased
tremendously over a short period of time. Most buyers of a house prefer plot size, older and structurally
poor quality houses. The paper tries to demonstrate the behavior of residential house market consumers
given the present housing condition of the city. The policy implication of this study is that the
implementation of the urban land and housing policy of the city administration should be accompanied
by improvement in the residential house market.
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Keywords
brokers,, real-estate price,, determinants of house price,, model of housing price