Factors Affecting Houses Price in Parramatta

Running head: HOUSES PRICE IN PARRAMATTA 1
Factors affecting the Houses Price in Parramatta
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HOUSES PRICE IN PARRAMATTA 2
Executive Summary
The analysis used Parramatta as the primary study region. The main objective of the study
was to determine which factors significantly influence the prices of houses. The research
applied the simple linear regression model to determine whether there was a significant
relationship between selling price and area of the houses. It was established that there was a
significant relationship between house prices and area in square feet. However, the model
explained little about sources of variation (1.7%), which raised questions about model
reliability. One-way ANOVA tests was carried out to determine whether one-bedroom, two-
bedroom and three-bedroom apartments prices were significantly different. Three-bedroom
apartment was found to be economical as it was cheaper than one and two-bedroom
apartment. Lastly, chi-square tests for independence was applied to the data and it established
that there was an association between the number of bedrooms and number of bedrooms.

HOUSES PRICE IN PARRAMATTA 3
Introduction
The study was determined to determine the sales of houses in the Parramatta, and factors
affecting the sales. Particularly, the primary objective is to determine the sales trend from
1999 to 2019 and identify factors that affect the average sales within this region in Australia.
Factors such as the floor area of the house, number of bedrooms, bathrooms and number of
slots of car parks were considered, and their effect on sales determined. Independence of
factors such as the number of cars park slots and bedrooms was analyzed. Thus, it will be
assessed whether the area in square feet, number of bedrooms and bathrooms, and the slots
available for car parking affect the house sales. The descriptive analysis will help determine
the data distribution, and inferential statistics will help determine the relation of the different
variables, and their effect on the sale price of houses.
Summaries
The descriptive statistics for the numerical variables was carried out and the results are as
summarized below.
Table 1: Descriptive statistics
Sale Price Area Bedrooms
Bathroom
s Car Parks
count 1305 1285 1148 1122 1083
mean 786,661.18 705.6430 3.13 1.50 1.64
sample standard
deviation 1,277,933.23 758.3750 3.06 3.00 1.19
sample variance 1,633,113,331,348.74 575,132.6140 9.36 8.97 1.43
minimum 0 50.6 0 0 0
maximum 19110000 9250.514759 99 99 14
range 19110000 9199.914759 99 99 14
1st quartile 365,000.00 436.3000 2.00 1.00 1.00
median 499,000.00 543.8000 3.00 1.00 1.00
3rd quartile 770,000.00 703.3100 4.00 2.00 2.00
interquartile range 405,000.00 267.0100 2.00 1.00 1.00
mode 400,000.00 461.6000 3.00 1.00 1.00

HOUSES PRICE IN PARRAMATTA 4
The summary indicates that the houses on average cost $786,661.18 (SD = $1,277,933.23).
The minimum cost is $0.00, which should be considered as absurd since that house has an
area of 361square feet, three bedrooms, two bathrooms and seven parking slots. The median
and mode are quite lower than the average, suggesting that the sale price data are positively
skewed. The distribution of the data is as illustrated in the histogram below.
0
1,200,000
2,400,000
3,600,000
4,800,000
6,000,000
7,200,000
8,400,000
9,600,000
10,800,000
12,000,000
13,200,000
14,400,000
15,600,000
16,800,000
18,000,000
19,200,000
0
10
20
30
40
50
Histogram of Sale price
Sale Price
Percent
Figure 1: Sale price histogram
The histogram supports that the sales price is highly skewed (Chambers, 2017).
The houses sold on average had an area of 1285 square feet (SD = 705.6430 square feet). The
minimum area is 50.6 square feet and a maximum of 9250.514759 square feet (Lowry, 2014).
The middle 50% of the houses have an area between 436.30 square feet and 703.31 square
feet. The mode and median are smaller than the mean, which suggests that the data are
positively skewed. The distribution of the area is as illustrated in the histogram below.