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Article
Publication date: 15 June 2021

Jayantha Wadu Mesthrige

“Ill-maintenance of common areas” in multi-owner residential properties is described as the “tragedy of anti-commons problem”. The problem can be addressed by outsourcing…

Abstract

Purpose

“Ill-maintenance of common areas” in multi-owner residential properties is described as the “tragedy of anti-commons problem”. The problem can be addressed by outsourcing the management of the property to a company possessing quality property management (PMGT) certification. The PMGT certification is normally hailed as an effective means of reassuring occupiers and prospective property buyers of the good level of quality of the property management to be expected. This study investigated whether PMGT certification carries with it a price premium for residential properties.

Design/methodology/approach

A fixed-effects modelling approach was employed in relation to a large residential properties dataset in Hong Kong, in the period 2009–2018.

Findings

The results indicate, on average, that the PMGT certification commands a price premium of between 3.3 and 3.9%. This premium can be called, the “tragedy of anti-commons premium (TAC premium)”. The results further suggest that significant price premium differences relate to the four different types of certifications studied. The price of a residential unit managed by a property management company (PMC) with Q-mark certification is about 3.4% higher than a unit managed by a non-certified PMC, ceteris paribus. Likewise, corresponding price premiums for units certified related to ISO9001 and HKMAQA certifications are 3.5 and 2.4%, respectively.

Originality/value

To the best of author's knowledge, this is the first attempt to investigate if there is any relationship between the property price premium attributed to “tragedy of anti-commons” and PMGT certification.

Details

Property Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 28 December 2020

Lydia Cheung and Mario Andres Fernandez

This study aims to test whether the size of and distance to the nearest green space has any effects on residential property transaction prices in Auckland, New Zealand.

Abstract

Purpose

This study aims to test whether the size of and distance to the nearest green space has any effects on residential property transaction prices in Auckland, New Zealand.

Design/methodology/approach

This paper divides all green spaces in Auckland into three categories, namely, urban parks, regional reserves and volcanic parks (a unique feature in Auckland, New Zealand). This study uses six years of residential property transaction data to estimate hedonic price regressions. For each property, this paper calculates the size of and distance to the nearest park in each category.

Findings

The logged sizes of the nearest regional reserve and volcanic park have positive effects on property prices. The logged distances to the nearest urban park and volcanic park are insignificant, while the logged distance to the nearest regional reserve is positively significant. In other words, homebuyers prefer larger regional reserves and volcanic parks and prefer to be further away.

Originality/value

Auckland is ranked as a top-five city in the world in terms of the proportion of public green space, trailing four European cities. However, because of Auckland’s much younger age, it presents a very different urban form. The study shows that the distribution of green space (not only its total amount) can bring negative capitalization on property prices.

Details

International Journal of Housing Markets and Analysis, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 7 December 2020

Ti-Ching Peng

Population ageing is fast becoming a major social concern across the globe. This ageing trend unavoidably fuels elders’ demand for healthcare services. As the main users…

Abstract

Purpose

Population ageing is fast becoming a major social concern across the globe. This ageing trend unavoidably fuels elders’ demand for healthcare services. As the main users of health care service, whether the healthcare is geographically approachable in local areas is more imperative to senior residents with restricted mobility. This paper proposes to examine the effect of elders’ healthcare accessibility on property prices of Taipei Metropolis, Taiwan.

Design/methodology/approach

Luo and Qi’s (2009) enhanced two-step floating catchment area method – taking both healthcare demand and supply into account – was used to measure three types of healthcare services: “physician-to-elder ratio”, “hospital bed-to-elder ratio” and “ambulance-to-elder ratio”. Spatial quantile regression (SQR) model was then used to examine the spatial effect of healthcare accessibility on different property price ranges.

Findings

The “physician-to-elder ratio” and “hospital bed-to-elder ratio” demonstrated expected consistent positive effects across all quantiles of property prices (p < 0.01) in SQR, and its effects aggravated as the quantiles of property prices rose. The “ambulance-to-elder ratio” demonstrated a non-linear influence on property prices (i.e. a negative effect on lowest quantile prices but a positive on higher quantile prices) possibly due to the semi-obnoxious characteristic of the ambulance. That is, residents living in lower priced neighbourhoods may dislike ambulances’ annoying sound of sirens (i.e. ambulances’ disamenity), while residents living in higher valued neighbourhoods may on the contrary appreciate ambulances’ healthcare services (i.e. amenity).

Practical implications

These findings are expected to offer some insights for government’s policies in providing elders in their later years with good residential quality and easy access to healthcare resource.

Originality/value

This paper is one of the few studies that consider the capitalization of the spatial healthcare accessibility to elders into property prices. In this ageing trend across the globe, although all the accessibility to medical resources should be equally critical, the application of spatial quantile regression revealed residents’ inconsistent tendency against semi-obnoxious ambulances. It provides a different perspective in defining the importance of healthcare accessibility in neighbourhoods.

Details

International Journal of Housing Markets and Analysis, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 1 May 1996

Shunichi Maekawa

In the past, the profit from property investments was always higher than that from other assets, because of the expectation of high rates of increase in land prices

Abstract

In the past, the profit from property investments was always higher than that from other assets, because of the expectation of high rates of increase in land prices. However, as Japan′s economic growth has been slowing down, these circumstances for property investments have changed. The income yield rate of commercial property investments in Tokyo decreased sharply from 1982 to 1987 because of the sharp increase in land prices. Though commercial land prices in Tokyo have decreased since 1992, the income yield rate is too low because of decrease of office rents. If the income yield rate does not increase, demand for commercial property investments will not recover because a high rate of increase in land prices cannot be expected in the future.

Details

Journal of Property Valuation and Investment, vol. 14 no. 2
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 4 September 2020

Michael McCord, Martin Haran, Peadar Davis and John McCord

A number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy…

Abstract

Purpose

A number of studies have investigated the relationship between energy performance certificates (EPCs) and house prices. A majority of studies have tended to model energy performance pricing effects within a traditional hedonic conditional mean estimate model. There has been limited analysis that has accounted for the relationship between EPCs and the effects across the pricing distribution. Moreover, there has been limited research examining the “standard cost improvements EPC score”, or “potential score”. Therefore, this paper aims to quantify and measure the dynamic effects of EPCs on house prices across the price spectrum and account for standardised cost-effective retrofit improvements.

Design/methodology/approach

Existing EPC studies produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price effect. The approach within this study applies a quantile regression approach to empirically estimate how quantiles of house prices respond differently to unitary changes in the proximal effects of EPCs and structural property characteristics across the conditional distribution of house prices. Using a data set of 1,476 achieved transaction prices, the quantile regression models apply both assessed EPC score and bands and further examine the potential EPC rating for improved energy performance based on an average energy cost improvement.

Findings

The findings show that EPCs are valued differently across the quantiles and that conditional quantiles are asymmetrical. Only property prices in the upper quantiles of the price distribution show significant capitalisation effects with energy performance, and only properties with higher EPC scores display positive significant effects at the higher end of the price distribution. There are also brown discount effects evident for lower-rated properties within F- and G-rated EPC properties at the higher end of the pricing distribution. Moreover, the potential energy efficiency rating (score) also shows increased effects with sales prices and appears to minimise any brown discount effects. The findings imply that energy performance is a complex feature that is not easily “averaged” for valuation effect purposes.

Originality/value

While numerous studies have investigated the pricing effects of EPCs, they have tended to provide a single estimate to determine the relationship with price. This paper extends the traditional analytical insights beyond the conditional mean estimate by examining the quantiles of the relationship between EPCs and house prices to enhance the understanding of this esoteric and complex issue. In addition, this research applies the assessed energy efficiency potential to establish whether effective cost improvements enhance the relationship with sales price and capitalisation effects.

Details

Journal of European Real Estate Research , vol. 13 no. 3
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 5 November 2020

Nishani Champika Wickramaarachchi, Seetha Kusum Chandani and Malka Thilini

Developing residential units is crucial in the socio-economic development of a country. The investor faces not only uncertain transaction price (price risk), but also…

Abstract

Purpose

Developing residential units is crucial in the socio-economic development of a country. The investor faces not only uncertain transaction price (price risk), but also uncertainties about the marketing period risk. Predicting when the incurred money is being realized is difficult because of the imperfect nature of the real estate market. Thus, the purpose of this study is to analyze the variables that explain the time on the market (TOM) of housing units, identifying the relationships in-between and the effects on TOM of residential properties.

Design/methodology/approach

Following a multi-stage sampling process, a random sample of 120 housing units was selected. Data were collected using a self-administered questionnaire. The questionnaire contained 57 variables that can affect TOM. Semi-structured interviews were conducted to confirm some of the data and information on residential units from the developers. Direct observations were conducted to verify certain physical attributes and, finally, they were comprehensively analyzed using quantitative analysis techniques in SPSS 16.0 Statistical package.

Findings

Results confirmed that lesser advertising prices, attractive environment, proximity to the city center and proper shape of lands reduce the TOM. Similarly, higher prices, longer distance to the city center and irregular shape of land increase the TOM. The results strengthen the necessity of a comfortable environment appropriate to live, probably with greenery or water bodies, which is a key influential factor that reduces the TOM in Sri Lanka.

Originality/value

wIn the Sri Lankan context, there are few contributions to the real estate literature in this regard. Many scholars have concentrated on physical and economic characteristics, whereas this research adds the environmental factors. Therefore, this research makes a significant contribution to the body of knowledge in this area, as it puts more attention on including several variables, as well as newly introduced variables as determinants. Consumers can apply the research findings to assess the relative importance of housing attributes and services which they perceive most valuable, and then to make their purchase decisions. The findings also contribute to the investigations of the behavior of housing attributes and enable knowing as to what factors are to be promoted and what to be omitted to gain a shorter TOM.

Details

International Journal of Housing Markets and Analysis, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 30 March 2020

Joseph Awoamim Yacim and Douw Gert Brand Boshoff

The paper introduced the use of a hybrid system of neural networks support vector machines (NNSVMs) consisting of artificial neural networks (ANNs) and support vector…

Abstract

Purpose

The paper introduced the use of a hybrid system of neural networks support vector machines (NNSVMs) consisting of artificial neural networks (ANNs) and support vector machines (SVMs) to price single-family properties.

Design/methodology/approach

The mechanism of the hybrid system is such that its output is given by the SVMs which utilise the results of the ANNs as their input. The results are compared to other property pricing modelling techniques including the standalone ANNs, SVMs, geographically weighted regression (GWR), spatial error model (SEM), spatial lag model (SLM) and the ordinary least squares (OLS). The techniques were applied to a dataset of 3,225 properties sold during the period, January 2012 to May 2014 in Cape Town, South Africa.

Findings

The results demonstrate that the hybrid system performed better than ANNs, SVMs and the OLS. However, in comparison to the spatial models (GWR, SEM and SLM) the hybrid system performed abysmally under with SEM favoured as the best pricing technique.

Originality/value

The findings extend the debate in the body of knowledge that the results of the OLS can significantly be improved through the use of spatial models that correct bias estimates and vary prices across the different property locations. Additionally, utilising the result of the hybrid system is thus affected by the black-box nature of the ANNs and SVMs limiting its use to purposes of checks on estimates predicted by the regression-based models.

Details

Property Management, vol. 38 no. 2
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 20 July 2020

Jan de Graaff and Joachim Zietz

The purpose of this study is to examine the impact of crime on apartment prices for Hamburg, Germany, for the years 2012 to 2017.

Abstract

Purpose

The purpose of this study is to examine the impact of crime on apartment prices for Hamburg, Germany, for the years 2012 to 2017.

Design/methodology/approach

The authors use a panel data setting with fixed effects estimators and temporal lags to moderate the endogeneity concerns related to crime. The authors consider the effect of total crime, violent and property crime and some sub-categories of crime.

Findings

The estimates show that it takes two to three years for prices to react, with the longer run elasticity reaching −0.12 for total crime, −0.15 for property crime and −0.06 for violent crime. The elasticities are much larger in high-crime areas (−0.22 for total crime, −0.28 and −0.09 for property and violent crime) and elevated also in low-income areas.

Social implications

The finding that property crime matters more in terms of quantitative impact for housing values than violent crime provides reasonable grounds for rethinking the resource allocation of public spending on crime clearance and prevention in Germany. Far more emphasis on preventing property crime appears in order and especially so in the lower income or higher crime areas, which are significantly more affected by crime and in particular property crime than those in high income or low crime areas.

Originality/value

The estimates for Hamburg provide the first detailed results of the impact of crime on real estate prices in Germany. It is also the first study for Continental Europe using panel data.

Details

Journal of European Real Estate Research , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

Keywords

Content available
Article
Publication date: 21 August 2018

Jonas Hahn, Jens Hirsch and Sven Bienert

The purpose of this paper is to investigate the role of distinct types of heating technology and their price impact in German residential real estate markets, considering…

Abstract

Purpose

The purpose of this paper is to investigate the role of distinct types of heating technology and their price impact in German residential real estate markets, considering a wide range of other housing market determinants. The authors aim to test and to verify specifically, whether the obsolescence of heating technology leads to a significant price discount and whether higher technological standards (and environmental friendliness) come with a price premium on the market.

Design/methodology/approach

The authors create housing market models for rental and sales segments by constructing generalized additive models with explicit multi-layered spatial components. To elaborate a profound and contemporary answer using these models, the authors perform large-sample regression analyses based on more than 400,000 observations covering German residential properties in 2015.

Findings

First and foremost, the heating system indeed shows significant explanatory importance for measuring housing rents and purchasing price. Second, the authors find that it makes a difference whether clean “green” technologies are implemented or whether “brown” systems with obsolete technology or fossil energy sources is on hand. Ultimately, the authors conclude that while low energy consumption indeed comes with a price premium, this needs to be interpreted together with the property’s heating type, as housing markets seem to outweigh the “green premium” by “brown discounts” if low energy consumption figures are powered by a certain type of heating technology system.

Research limitations/implications

Aside of a possible omitted variable bias, the main research limitation is constituted by the integration of asking prices in the analysis, as actual transaction prices are not systematically transparent on national level in Germany. Limitations are discussed at the end of the paper.

Practical implications

This work supports investors who face the challenge of making environmental- and energy-related decisions as well as appraisers who deliver financial fundamentals for such. Third, the paper supports both asset managers as well as investment strategists in argumentation pro-environmental investments beyond all ecological necessity.

Social implications

This paper contributes to the current discussion on climate change and the eclectic role of real estate in this context. The authors deliver evidence on pricing effects as a measure of socioeconomic acceptance of progressive heating technology and environmental friendliness as an imperative of twenty-first century societies.

Originality/value

This is the first study on “green premiums” or “brown discounts” that includes heating technology as a potential and distinct driver of value and rents. It is a contemporary contribution and delivers original information on the quantitative impact of contemporary and anachronistic technology in heating to researchers as well as investors and appraisers.

Details

Property Management, vol. 36 no. 5
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 September 2000

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property

Abstract

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

Details

Facilities, vol. 18 no. 9
Type: Research Article
ISSN: 0263-2772

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