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Stang, Moritz ; Krämer, Bastian ; Nagl, Cathrine ; Schäfers, Wolfgang

From human business to machine learning—Methods for automating real estate appraisals and their practical implications

Stang, Moritz , Krämer, Bastian, Nagl, Cathrine und Schäfers, Wolfgang (2022) From human business to machine learning—Methods for automating real estate appraisals and their practical implications. German Journal of Real Estate Research 9 (2), S. 81-108.

Veröffentlichungsdatum dieses Volltextes: 11 Jun 2026 08:05
Artikel
DOI zum Zitieren dieses Dokuments: 10.5283/epub.79579


Zusammenfassung

Until recently, in most countries, the use of Automated Valuation Models (AVMs) in the lending process was only allowed for support purposes, and not as the sole value-determining tool. However, this is currently changing, and regulators around the world are actively discussing the approval of AVMs. But the discussion is generally limited to AVMs that are based on already established methods such ...

Until recently, in most countries, the use of Automated Valuation Models (AVMs) in the lending process was only allowed for support purposes, and not as the sole value-determining tool. However, this is currently changing, and regulators around the world are actively discussing the approval of AVMs. But the discussion is generally limited to AVMs that are based on already established methods such as an automation of the traditional sales comparison approach or linear regressions. Modern machine learning approaches are almost completely excluded from the debate. Accordingly, this study contributes to the discussion on why AVMs based on machine learning approaches should also be considered. For this purpose, an automation of the sales comparison method by using filters and similarity functions, two hedonic price functions, namely an OLS model and a GAM model, as well as a XGBoost machine learning approach, are applied to a dataset of 1.2 million residential properties across Germany. We find that the machine learning method XGBoost offers the overall best performance regarding the accuracy of estimations. Practical application shows that optimization of the established methods—OLS and GAM—is time-consuming and labor-intensive, and has significant disadvantages when being implemented on a national scale. In addition, our results show that different types of methods perform best in different regions and, thus, regulators should not only focus on one single method, but consider a multitude of them.



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Details

DokumentenartArtikel
Titel eines Journals oder einer ZeitschriftGerman Journal of Real Estate Research
Verlag:Duncker & Humblot
Band:9
Nummer des Zeitschriftenheftes oder des Kapitels:2
Seitenbereich:S. 81-108
Datum2022
InstitutionenWirtschaftswissenschaften > Institut für Immobilienenwirtschaft / IRE|BS > Lehrstuhl für Immobilienmanagement (Prof. Dr. Wolfgang Schäfers)
Wirtschaftswissenschaften > Institut für Immobilienenwirtschaft / IRE|BS
Identifikationsnummer
WertTyp
10.1365/s41056-022-00063-1DOI
Stichwörter / KeywordsAutomated Valuation Models · Extreme Gradient Boosting · Housing Market · Machine Learning · Sales Comparison Method
Dewey-Dezimal-Klassifikation300 Sozialwissenschaften > 330 Wirtschaft
StatusVeröffentlicht
BegutachtetJa, diese Version wurde begutachtet
An der Universität Regensburg entstandenJa
URN der UB Regensburgurn:nbn:de:bvb:355-epub-795799
Dokumenten-ID79579

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