Title: What are the most important factors that influence the changes in London Real Estate Prices? How to quantify them?,
Abstract: In recent years, real estate industry has captured government and public
attention around the world. The factors influencing the prices of real estate
are diversified and complex. However, due to the limitations and one-sidedness
of their respective views, they did not provide enough theoretical basis for
the fluctuation of house price and its influential factors. The purpose of this
paper is to build a housing price model to make the scientific and objective
analysis of London's real estate market trends from the year 1996 to 2016 and
proposes some countermeasures to reasonably control house prices. Specifically,
the paper analyzes eight factors which affect the house prices from two
aspects: housing supply and demand and find out the factor which is of vital
importance to the increase of housing price per square meter. The problem of a
high level of multicollinearity between them is solved by using principal
components analysis.