Floods and Residential Property Values: A Hedonic Price Analysis for the Netherlands

Abstract

The central question addressed in this article is whether floods have an impact on residential property values. In the Netherlands floods of the Meuse river in 1993 and 1995 had negative effects on prices of the houses that were affected; specifically a decrease of about 9 per cent. An analysis of sales in municipalities along the river during the decade after this period reveals that this price decrease has been permanent. We also find countervailing effects related to water: a location close to the water has an upward effect on property values of up to 3 per cent.