Abstract
Preliminary desktop studies have been carried out to illustrate the potential value of metropolitan open space areas in Durban and Cape Town using speculative estimates derived mainly from values in the international literature. This paper investigates the effects that a selected open space (Zandvlei in Muizenberg) has on nearby property values and attaches values to the space using a combination of estate agent interviews and statistical analysis (hedonic pricing). The results indicate that using statistical analysis generates reasonably similar valuation estimates when compared to the use of estate agent interviews. The property price premiums or discounts associated with open spaces are found to be case specific, but certain trends are discernable that should apply to all areas. Finally, the strengths and weaknesses of the property price approach are discussed.
Highlights
Two studies into the metropolitan open spaces of Cape Town (Common Ground, 2000) and Durban (Markowicz et al, 1999) extrapolated estimates from the international literature to obtain preliminary values of open spaces. These studies alerted city personnel to the services provided by open space areas, and to the use of environmental valuation tools in assessment and management decision-making
This paper uses hedonic theory to investigate the effects of open spaces on nearby property values in a selected part of Cape Town
The approach differs from the norm in using both a characteristics approach, based on estate agent interviews, and a more conventional statistical technique
Summary
Two studies into the metropolitan open spaces of Cape Town (Common Ground, 2000) and Durban (Markowicz et al, 1999) extrapolated estimates from the international literature to obtain preliminary values of open spaces. These studies alerted city personnel to the services provided by open space areas, and to the use of environmental valuation tools in assessment and management decision-making. Hedonic theory presumes that property prices capture the physical characteristics of houses and properties, and environmental and social characteristics such as proximity to open space, views and security This link allows the valuation of these environmental characteristics. The applicability of the valuation results to other similar areas in Cape Town is briefly discussed
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