A Hybrid Approach for Mass Valuation of Residential Properties through Geographic Information Systems and Machine Learning Integration

Abstract

Geographic Information Systems (GIS) and Machine Learning methods are now widely used in mass property valuation using the physical attributes of properties. However, locational criteria, such as as proximity to important places, sea or forest views, flat topography are just some of the spatial factors that affect property values and, to date, these have been insufficiently used as part of the valuation process. In this study, a hybrid approach is developed by integrating GIS and Machine Learning for mass valuation of residential properties. GIS-based Nominal Valuation Method was applied to carry out proximity, terrain, and visibility analyses using Ordnance Survey and OpenStreetMap data, than land value map of Great Britain was produced. Spatial criteria scores obtained from the GIS analyses were included in the price prediction process in which global and spatially clustered local regression models are built for England and Wales using Price Paid Data and Energy Performance Certificates data. Results showed that adding locational factors to the property price data and applying a novel nominally weighted spatial clustering algorithm for creating a local regression increased the prediction accuracy by about 45%. It also demonstrated that Random Forest was the most accurate ensemble model.