Value of scenic views: Hedonic assessment of private housing in Hong Kong

Abstract

Diverse landscape elements in cities are valued differently by residents. People are willing to pay a premium for attractive views. This study assessed the amenity value of two major types of natural landscape in Hong Kong: harbor and mountain. The study was based on 1474 transactions in 2005 and 2006 in 18 private housing estates in a residential district. The high-rise and high-density blocks were typical for middle-income housing in the city. The hedonic pricing method was employed to estimate the proportional share of various views and factors on transaction prices. Only harbor view was preferred and reflected in housing value. A broad harbor view could increase the value of an apartment by 2.97%, equivalent to US$ 15,173. Even a confined harbor view could lift price by 2.18% or US$ 11,137. On the contrary, a broad mountain view would depress apartment price by 6.7%, whereas a confined mountain view was statistically insignificant. Increasing distance between an apartment and a preferred natural landscape would lower transaction price. The negative perception of street view induced a price reduction by 3.7%. Building views were tolerated as an inevitable feature of the compact and vertical city. Quantifying the value of nature and scenic endowments in cities could inform policies and strategies on urban planning, development, nature conservation, and property appraisal.