A Study on Impact of Residential Property Value Based on Designated Heritage Property with Special Reference to the City of Kandy-Sri Lanka

Abstract

Real properties are fixed assets with a bundle of rights. Thus, the freehold property owners could possess, use, abuse and even destroy his real property. However, the rate of re-development and high demand has directly affected the increase of a clear site value of the property than the present capital value of the property. Further, the property owner always considers the highest and the best use of the property. In this situation, there is a less possibility for redevelopment of the property as there is reason for legal restraints of the heritage-designated property. Harvey & Jowsey (2004)) introduces methods of preserving a historic building, when a period of time the clear site value has been increasing than the present capital value of the property. In addition, after a period, ‘value as a historic house’ the heritage property value increases than the clear site value. However, heritage properties generally performs well and has a significant demand in the market. Few researchers had identified that there were less/no-observable impact on the property value of heritage-designated property. Therefore, this research focuses on the investigation of the impact of heritage designation on the residential property value in Kandy in Sri Lanka with reference to the methods introduced by Jack Harvey in 2004 on preserving a historic building through the given methods. This research was a case based study, which consists of a literal review, a detailed survey and analysis. The Kandy world heritage city was selected as the case study where 112 residential properties were designated as heritage property in 1987 in Kandy. These 112 heritage designated residential properties were selected as the sample and a detailed survey was carried out based on observations and interviews. Further, both quantitative and qualitative methods were applied for the analysis. The quantitative analysis was carried out by using a linear regression model. Both qualitative and quantitative analysis showed that the small-scale properties have less possibility to increase their present capital value of the property than the clear site value of the property. Further, when declaring heritage properties, it is essential to consider the scale of the property and the level of its contribution to the city image as a heritage property. Moreover, the government intervention is also essential to improve those heritage properties.