Estimating Commercial Property rentals in the Greek Market using Multiple regression analysis

The examination of the application of multiple regression analysis as a tool for modelling real estate aspects has been the object of several research papers. The latter mainly target to the explanation of commercial and residential property values and rental prices through the statistical analysis of their characteristics. The aim of this paper is to examine the possibility of using multiple regression analysis for explaining rental prices of commercial property in the Greek property market. The results of the analysis are subsequently compared with similar studies referring to the international property market. The relevant available literature has been thoroughly examined the factors which affect commercial and especially office rental prices have been identified and a pragmatic survey has been conducted for the selection of the factors, which were going to be considered for the creation of the statistical model. The final selection of the variables of the model was additionally determined by restrictions and limitations imposed by the nature of the factors, the availability of the data and most important by the limited time available for the study. The sample used for the statistical analysis derived from Athens city centre, where data are easier to acquire and respective transactions are representative of the market. The final regression model was acquired based on a sound statistical analysis, in order for a satisfactory explanatory level to be achieved. Alternative forms of analysis have also been attempted, such as of log-linear models or introduction in the linear regression model of alternative sets of variables. It should be noted that several factors with a potentially significant explanatory power have been omitted from the analysis, due to time restrictions and the increased complexity involved in the data collection. This fact has dictated the need for the presentation of potential alternatives and additions to the model, which could provide improved results and consist, thus the object of future research. The paper concludes with general comments on the Greek property market, an overview of its evolution during the past years, the expected growth and the way that these can be reflected in similar analyses and statistical models, incorporating the factor time as well.