A GRID-Based Spatial Interpolation Method as a Tool Supporting Real Estate Market Analyses

Abstract

The spatial distribution of prices is closely linked with the urban real estate market. Property prices are one of the key indicators of economic activity because they influence economic decisions. Decision-makers and consumers often need information about the spatial distribution of prices, but spatial-temporal analyses of the real estate market are based on the prices quoted in different locations across years (epochs). Due to this idiosyncrasy, the resulting datasets are dispersed (different across years) and difficult to compare. For this reason, the existing interpolation methods are not always effective in analyses of the real estate market. A different approach to interpolating real estate prices that supports the generation of continuous interpolated surfaces while maintaining the values of measurement points is thus needed. This paper proposes a method for replacing dispersed spatial data with a regular GRID structure. The GRID structure covers the measured object with a regular network of nodes, which supports uniform interpolation at every point of the analyzed space and a comparison of interpolation models in successive epochs (years). The proposed method was tested on a selected object. The results indicate that the GRID structure can be used in analyses of highly complex real estate markets where input data are incomplete, irregular and dispersed.

Keywords

• spatial distribution
• grid structure
• housing
• property price
• real estate market