Deep Learning in Predicting Real Estate Property Prices: A Comparative Study

Abstract

The dominant methods for real estate property price prediction or valuation are multi-regression based. Regression-based methods are, however, imperfect because they suffer from issues such as multicollinearity and heteroscedasticity. Recent years have witnessed the use of machine learning methods but the results are mixed. This paper introduces the application of a new approach using deep learning models to real estate property price prediction. The paper uses a deep learning approach for modeling to improve the accuracy of real estate property price prediction with data representing sales transactions in a large metropolitan area. Three deep learning models, LSTM, GRU and Transformer, are created and compared with other machine learning and traditional models. The results obtained for the data set with all features clearly show that the RF and Transformer models outperformed the other models. LSTM and GRU models produced the worst results, suggesting that they are perhaps not suitable to predict the real estate price. Furthermore, the implementations of Transformer and RF on a data set with feature reduction produced even more accurate prediction results. In conclusion, our research shows that the performance of the Transformer model is close to the RF model. Both models produce significantly better prediction results than existing approaches in terms of accuracy.