Abstract
In response to the public’s increasing awareness of sustainable development, the construction industry has introduced “green” buildings which emphasize better environmental performance. However, as a building’s environmental performance is difficult to discern for laymen, different green building certifications have been established for evaluations in this regard. This study evaluates whether there exists a price premium for living space in buildings certified with BEAM Plus. The findings show that the prices of flats in BEAM Plus-certified buildings are 4.4% higher than those in nonregistered buildings, and that housing units in buildings with an “unclassified” rating are transacted at a discount of 5.9%. Nevertheless, if homebuyers mistake an “unclassified” building for a non-registered building, due to the non-disclosure of the “unclassified” result by developers, the price premium of BEAM Plus certification becomes higher (6.2%). Regardless, the price premium is much lower than those on the office sector. The reasons behind such differences can be attributed to the disparities in the tangible and intangible benefits associated with green living space and green office space. Policy implications with reference to Hong Kong’s GFA concession policy are then discussed.
Highlights
As the notion of sustainable development has become increasingly popular since the early 1990s (Gibbs et al 1996), more customers have placed a higher degree of importance on environmental protection than on economic growth (Mainieri et al 1997)
This study has evaluated the price effect of BEAM Plus certification on flats in sixteen residential developments within the Sham Shui Po – Cheung Sha Wan district
The findings first show that the prices of flats in BEAM Plus-certified buildings are 4.4% higher than those in non-registered buildings, and that flats in buildings with an “unclassified” rating under BEAM Plus are transacted at a discount of 5.9%
Summary
As the notion of sustainable development has become increasingly popular since the early 1990s (Gibbs et al 1996), more customers have placed a higher degree of importance on environmental protection than on economic growth (Mainieri et al 1997). The demand for goods and services with lower environmental costs has soared. To put it differently, there exists a willing-to-pay (WTP) premium for these products over regular products. Companies in various business sectors have begun to take environmental considerations into account in their business operations (Berry, Rondinelli 1998), as well as production and marketing plans This results in an expanding market for eco-friendly products (and services) on a global scale (Fuerst, McAllister 2011). Such emphasis on the preservation of the environment has generated an even more profound im-
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
