The impact of residential development on nearby housing prices

Antti Kurvinen, Jaakko Vihola

    Research output: Contribution to journalArticleScientificpeer-review

    2 Citations (Scopus)

    Abstract

    Purpose - Even as multi-story apartment building development proposals in existing neighbourhoods represent a substantial component of policy debate at local planning boards, there is limited evidence for the impact of such residential developments on surrounding apartment values. The void in knowledge is addressed in this study, and the impact of multi-story apartment building developments on apartment values in residential high-rise areas located outside city and district centres is investigated in Helsinki Metropolitan Area, Finland.

    Design/methodology/approach - Whether a multi-story apartment building development is followed by an increase in housing values depends on both positive and negative externalities. To specify valuation effects of proximate development projects, advanced research design combining matched sample methodology and hedonic-based difference-in-difference approach is used.
    Findings It appears from the analysis that completion of a single multi-story apartment building has an immediate positive impact on apartment values within 300 metre radius. While, there is no statistically significant impact on price trend.

    Research limitations - This paper studies apartment values only in Helsinki Metropolitan Area, Finland, and it is important to notice that local regulations and market conditions may have a notable impact on the outcomes.
    Originality/value This study is the first of its kind to provide with statistically significant evidence for positive impacts from multi-story apartment building development in Finnish residential high-rise areas, and may have a crucial role in helping to dispel prejudices related to such developments.
    Original languageEnglish
    Pages (from-to)671-690
    Number of pages4
    JournalInternational Journal of Housing Markets and Analysis
    Volume9
    Issue number4
    DOIs
    Publication statusPublished - 2016
    Publication typeA1 Journal article-refereed

    Keywords

    • residential real estate
    • real estate development
    • infill development
    • externalities
    • residential property values
    • multi-story apartment buildings

    Publication forum classification

    • Publication forum level 1

    ASJC Scopus subject areas

    • Building and Construction
    • Economics, Econometrics and Finance (miscellaneous)

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