Determinants of the price of rental apartment in the city of Porto Alegre, Rio Grande do Sul (2020)

Abstract

The price of residential rent can be influenced by several factors, intrinsic or extrinsic. In this context, this paper aims to estimate the determinants of residential rent prices in the city of Porto Alegre, Rio Grande do Sul. The theoretical construct of the paper is based on the hedonic pricing approach. The sample used contains 994 residential properties. The analysis was done through multiple regression estimated via robust estimators, with the following determinants used: Area m2, Floor, Nº Bedrooms, Nº Bathrooms. Parking Spaces, whether the property accepts pets or not, and whether the property is furnished or not. The analysis was perfomed through multiple regression estimated via robust estimators, with the following determinants used: Area m2, Floor, Nº Bedrooms, Nº Bathrooms. Parking Spaces, whether the property accepts pets or not, and whether the property is furnished or not. The results found corroborate previous studies, reaffirming that variables used in the estimated model positively impacted the rental price of properties. It is worth noting that the furniture variable was the one that most impacted the price of rent, the presence of furniture impacts the price of rent by 25.80%. The variable regarding the permission of pets was the only one that negatively affected the price of the properties according to the estimated model.