Purchasing a home is a large decision, especially when the potential buyer is considering moving to another country. Real estate decisions are easiest to make when given clear data about the housing market. Without clear data, it is difficult to know the correct price to offer home sellers. In the past 2 years, housing prices in Amsterdam have dramatically increased as domestic and international buyers enter the city. Peter Beerents, senior managing partner of an Amsterdam located luxury home agency group, referred to the city as “one of the most sought-after destinations by expats and international companies” due to the variety of languages, the strong labor market, prime airport location, and good international tax climate (Schubach, 2022). The rapid changes in Amsterdam's housing market have given buyers a limited time frame to know relevant prices of comparable houses.
A machine learning driven solution can frequently be updated with current information about the housing market. In this project, we will be using August 2021 data to predict house prices based on zip code, size, and number of rooms. According to Brxs, the price per area (square meters) is greatly dependent on the neighborhood in Amsterdam, which indicates our dataset's features are promising price predictors (Nuytemans, 2022).
If this effort is successful, we will create a regression that can predict Amsterdam housing prices at this snapshot in time (August 2021). Creating this prediction could help domestic and international home seekers looking to settle in Amsterdam.
We will use a Kaggle Dataset of August 2021 Amsterdam House Prices to observe the following features for each house sold. The author gathered information from Pararius.nl and Mapbox API for this Kaggle Dataset.
In addition to the features listed above, each house sold has a price. This project will use the zip code, area, and room number to predict the selling price.
A potential problem we observed is the timeframe of our data. The data is slightly outdated and limited to one snapshot in time. A regression built off this information might be able to predict housing prices at that moment in time, but the regression will not necessarily hold true in the future. To mitigate this problem, we will not assume the predictions can work in the future and work on gathering different timeframes of data for further analysis.
import pandas as pd
# note: file must be next to jupyter notebook in same folder
#pd.read_csv('HousingPrices-Amsterdam-August-2021.csv')
df = pd.read_csv('HousingPrices-Amsterdam-August-2021.csv',index_col=0)
df.head(5)
| Address | Zip | Price | Area | Room | Lon | Lat | |
|---|---|---|---|---|---|---|---|
| 1 | Blasiusstraat 8 2, Amsterdam | 1091 CR | 685000.0 | 64 | 3 | 4.907736 | 52.356157 |
| 2 | Kromme Leimuidenstraat 13 H, Amsterdam | 1059 EL | 475000.0 | 60 | 3 | 4.850476 | 52.348586 |
| 3 | Zaaiersweg 11 A, Amsterdam | 1097 SM | 850000.0 | 109 | 4 | 4.944774 | 52.343782 |
| 4 | Tenerifestraat 40, Amsterdam | 1060 TH | 580000.0 | 128 | 6 | 4.789928 | 52.343712 |
| 5 | Winterjanpad 21, Amsterdam | 1036 KN | 720000.0 | 138 | 5 | 4.902503 | 52.410538 |
We will present our output as a line of best fit regression to show estimated housing prices. This approach can show the 5%, 50%, and 95% percentiles for housing prices depending on the features the house has. Additionally, we can plot these predicted price ranges over a map of Amsterdam for easy interpretation.
Maps, geocoding, and Navigation Apis & sdks. Mapbox. (n.d.). Retrieved February 27, 2023, from https://www.mapbox.com/
Nuytemans, F. (2022, December 23). Everything you need to know about the Amsterdam housing market. Amsterdam Housing market: House prices per neighborhood. Retrieved February 27, 2023, from https://www.brxsapp.com/blog/housing-prices-amsterdam-2022
pararius.com. (n.d.). Retrieved February 27, 2023, from https://www.pararius.com/info/about-pararius
Schubach, A. (2022, June 22). Competition up in Amsterdam as domestic and international buyers Flood Market. Mansion Global. Retrieved February 27, 2023, from https://www.mansionglobal.com/articles/competition-up-in-amsterdam-as-domestic-and-international-buyers-flood-market-01655891574
Thomasnibb. (2021, August 24). Amsterdam house price prediction. Kaggle. Retrieved February 27, 2023, from https://www.kaggle.com/datasets/thomasnibb/amsterdam-house-price-prediction