Abstract
The paper analyzes the reaction of residential property prices to sustainability attributes and the extent to which they capitalize the effects of sustainability on real estate markets in EU-28 countries in the period 2000–2018. Given that the sustainable real estate market is mainly driven by demand, the sustainability attributes included in the study reflect both buyers’ expectations and their investment potential in sustainable residential properties, and developers’ efforts to become more “sustainable” through responsible property investment. In order to correspond to the current meaning of sustainable development, the variables capture the four dimensions that give content to the concept of the quadruple bottom line: economic, social, environmental and institutional. Using panel data and the two-stage least squares (2SLS) method, the research reveals a pronounced sensitivity of residential property prices to all sustainability dimensions in countries considered leaders in implementing the Sustainable Development Goals (SDGs), characterized by a strong institutional environment, and efficient and transparent real estate markets. In countries less committed to SGD implementation, weak governance and higher corruption negatively affect the transparency of real estate markets, and the dynamics of the price of residential transactions are determined only by the economic and social dimensions of sustainability.
Highlights
IntroductionBy exerting direct influences on human health and well-being, the environment and economic development, the real estate sector accounts for more than half of global wealth and, it is expected to make a decisive contribution to achieving the goal of sustainable development
The ultimate goal of sustainable development is to increase the quality of life [1]
As the economic reality of recent decades has shown that the dynamics of real house prices are influenced by the fundamental factors of supply and demand, and by the structural features of the institutional framework in which entities and citizens operate [80], we introduced in the analysis a variable for governance efficiency (WGI)
Summary
By exerting direct influences on human health and well-being, the environment and economic development, the real estate sector accounts for more than half of global wealth and, it is expected to make a decisive contribution to achieving the goal of sustainable development. Sustainability in the real estate sector has gone from being a niche to a mass trend. This move has been accompanied by a change in the perception of the real estate industry which has begun to adopt global sustainable development policies for the benefit of developers, end users and society [3].
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