In most studies, price modelling is used to explain the variation in price.

The characteristics of a
property is used as explanatory variables. The main theory in this field is hedonic price theory.
This theory can be traced back to the work complete by [17] in 1966 and [18] in 1974. It is the
main theory of reference to explain price in the housing market. In this theory the price of a
good, in this instance a house, depends on its characteristics. Because this theory uses the basic
characteristics of a house such as number of bedroom and size, numerous research has been
published on its limitations. Notable research focuses on the effect of location on price. Location
factors include distance to work, transport systems, accessibility to schools and other amenities
[19]. One caveat in using hedonic pricing models is that the results are location-specific and are
difficult to generalize across different geographic regions [20, p.2]. This suggests that that
location is a key factor in determining price. Similarly [21] found that buyers were willing to pay
more for properties with quick accessibility to public transport. However, [22] argued housing is
a multidimensional commodity separated into a package of attributes that vary in both quantity
and quality. Accordingly, the hedonic housing price regression becomes an operational tool that
functionally links housing expenditures to some measures of attributes of houses. In the study
conducted by [18] they articulated 125 hedonic models based on American house prices. They
found that size related to the overall property and land had the best predictive utility.

In most studies, price modelling is employed to clarify the variation in price. The characteristics
of a property are used as instructive variables. The underlying concept of hedonic price theory.
This theory can be retraced back to the work complete by [17] in 1966 and [18] in 1974. It’s the
central theory of relevance to describe price within the housing market. In theory, the value of a
commodity, -for instance a house- depends on its characteristics. This is accounted due to the
fact that this theory uses the essential characteristics of a house like number of room and size,
and a number of studies revealed its limitations. Notable analysis focuses on the impact of
location on price. Location factors involve distance to the workplace, accessibility to transport
systems, accessibility to colleges and numerous other amenities [19]. The primary demerit in
employing the use of hedonic pricing models is that the results are location-specific and are hard
to generalize across completely different geographic locations [20, p.2]. This means that that
location could be a key consideration for determining price. Likewise [21] found that consumers
were willing to pay additional for properties with fast accessibility to conveyance. However, [22]
argued housing could be a multifaceted product, father separated into a smaller packages of
attributes that change in both the quantity and quality. Consequently, the hedonic housing price
regression becomes an operational tool that functionally links housing expenditures to some
measures of attributes of homes. Within the study conducted by [18] they articulated one
hundred twenty five hedonic models purely built upon American house prices. They found that
size associated with the general property and land had the most effective predictive utility.