Residential Property Market Research Articles

Renewable Energy Sources in the Residential Property Market, Exemplified by the City of Krakow (Poland)

Krakow has a permanent population of over 800,000. The number of inhabitants is increasing year on year due to the influx of working people and students, who often settle in Krakow permanently. This is leading to increased demand and consequently more flats and houses being put into use by developers. The increasing environmental awareness of the population and the resulting financial benefits—particularly evident in 2022—have meant that the classic, or rather ill-considered, building industry is gradually being replaced by better, environmentally friendly solutions. In the first part of the article, the authors focus on smart buildings, and in the second part, they combine them with financial changes in the real estate market. The aim of the publication is to draw conclusions from the changes in the real estate market in Krakow that have taken place in the last decade and to assess these activities from the point of view of environmental solutions. The data are mainly derived from official statistics and trade reports published by research institutes, marketing agencies operating in the real estate sector in Poland, as well as specialist portals and publications dealing with real estate market analysis. The publication analyzes changes in the real estate market in terms of changes in unit prices, number of transactions, and availability. The analysis covers landed property, the primary and secondary premises market, developed property, and tenement buildings.

Empirical effects of the designation of milieu protection areas on the residential property market in Berlin

ABSTRACT Milieu protection areas (MPAs) are a frequently used urban policy regulation method in large German cities such as Berlin or Munich. MPAs protect residents from displacement by restricting property rights in designated zones through limitations on modernisation and the conversion of rental apartments into condominiums. Policymakers expect this to have a price-dampening effect and slow gentrification while also anticipating corresponding effects on property markets. This study investigates the long-term empirical effects of these restrictions on the Berlin residential property market and examines how milieu protection affected the purchase prices and transactions of condominiums within Berlin’s MPAs and their surroundings. We relate transaction data from 1991 to 2019 with other neighbourhood characteristics, regress prices, and the number of transactions using geographic information systems and regression difference-in-differences models in different spatial submarkets both inside and outside of the MPAs. Results indicate that milieu protection reduces transaction activity in property markets and regulation has been ineffective in curbing price increases. Meanwhile, limitations on the conversion of former rental flats have led to lower price increases compared to the surrounding areas. This study contributes to the understanding of regulation as a potential determinant of supply and price effects in the property market.

The impact of government spending on Ireland’s housing and residential market – Targeted vs economy-wide stimulus

The Irish residential property market is currently characterized by a considerable structural deficiency in housing supply compared to the underlying level of demand. The lack of housing has led to several economic and social problems in Ireland. The imbalance between supply and demand has led to both house prices and rents increasing faster than household incomes. Recent policy initiatives by the Irish Government have outlined plans for significant spending aimed at increasing the numbers of housing completions to tackle these issues. This paper examines the impact of government spending on housing supply using a structural econometric model of the Irish economy with a specific construction block. Within our econometric analysis, we compare the results of an economy wide versus a sector specific government stimulus on the property market. Our simulations suggest that, in order to achieve social and economic goals like increasing the number of dwellings and making housing more affordable by containing house price inflation, a targeted policy such as that described in the Irish Government's Housing for All plan may be preferable to an economy-wide stimulus.

Investigating Tenant Selection Bias and Discrimination in the Enugu Metropolitan Residential Property Market, Nigeria

The rapid rise in Nigeria’s population has led to a corresponding increase in demand for rental housing prompting real estate investors to capitalize on the opportunity by providing private rental housing for the teeming population and offset government’s inability to provide adequate accommodation. As the source of income of a rented house is the tenant, it is important for the landlord or his agent to select the best possible tenant. This paper investigates the tenant selection criteria adopted by registered Estate Surveying and Valuation firms in Enugu metropolis to identify the requirements for tenant selection and to examine the nature of bias and discrimination in their selection process with a view to determining the important criteria required of prospective tenants in securing a rental accommodation. The study adopts a survey research method. Structured questionnaires were administered to 44 registered real estate firms in Enugu metropolis. Data collected were analyzed using Relative Importance Index (RII) to rank tenant selection criteria. Findings revealed that though important tenant selection criteria such as employment/occupation (0.9758), nature of employment (0.9635), and ability to pay rents (0.9592) rank 1st, 2nd, and 3rd respectively, bias and discrimination factors such as ethnicity (0.8976), family size (0.8863), marital status (0.8757), and religion (0.8571) rank 4th, 5th, 6th and 7th respectively. Thus, there is a significant level of bias and discrimination in tenant selection in Enugu metropolis residential property market. The study recommends enactment of legislation that outlines the criteria to adopt when selecting tenants which is devoid of all forms of bias and discrimination, national re-orientation of citizens against ethnic bias which is the predominant form of bias in tenant selection, and enlightenment of landlords and property managers on the consequences of bias in tenant selection.

Factors influencing buyers’ and investors’ decisions in acquiring property in hillside areas

This study aims to investigate and discuss the factors that influence buyers’ and investors’ decision in buying and investing in property in hill land areas. A sequential mixed methods approach, which involved extensive literature review, questionnaire survey and semi-structured interview was used. Literature review to identify influencing factors was followed by a questionnaire survey. A total of 373 valid questionnaires were analysed. Ten (10) semi-structured interviews were performed thereafter to clarify and validate the survey findings. The study found that only a slight majority were aware of the risk of landslide owing largely to the fact that, not every neighborhood had experienced landslide incidents. Understanding on the relationship between factors that influencing buyers/investors to acquire property in hillside area and provides useful insights that that the combination of influencing factors and a vibrant residential property market relatively outweighs the risks associated with landslide occurrence in the study area.

Prospecting Housing Bubbles in Malaysia

Abstract There have been extensive studies pertaining on bubble detection in literature, though very few investigate the Malaysian residential property market. The inflated housing market, however, has sparked widespread public anxiety and there has been a proliferation of comments and forecasts about the presence of housing bubbles in Malaysia throughout the last decade. The purpose of this paper is to assess the housing bubbles in Malaysia by using empirical models in detecting Malaysian residential property bubbles. This research employed the Markov Switching (MS) model to investigate the housing bubbles for the Malaysian residential property market. The findings revealed Malaysian housing prices to be relatively stable over the period 2010 to 2019, with states of upheaval occurring only during short-lived periods. Overall, Malaysian housing prices were generally steady between 2010 and 2019, albeit this has shifted slowly in recent years as economic turmoil faded. This study provides empirical results to explain the situation of Malaysian house prices in the recent years.

Why pay for sustainable housing? Decomposing the green premium of the residential property market in the Canton of Zurich, Switzerland

Various studies have shown that green buildings trade at a premium, with estimates of it ranging widely from low single-digits up to 26% for sales values and up to 21% for rents. There is, however, little quantified evidence of why people are willing to pay more for sustainable housing. We investigate the green premium for MINERGIE-certified residential properties in the Canton and City of Zurich, which have among the highest densities of certified green buildings worldwide. Using a comprehensive data set of 17,743 condominiums for sale and 50,075 apartments for rent, we show that the premium can be decomposed and associated with various benefits for owners and tenants. The overall green premia in the canton amount to 2.45% and in the city to 4.91%. From these total premia, 6% (city: insignificant) are attributed to energy savings, 71% (city: 70%) to increased comfort, and 23% (city: 33%) to making the building future proof against regulators and market participants.

Lead-Lag Relationship between the Price-to-Rent Ratio and the Macroeconomy: An Empirical Study of the Residential Market of Hong Kong

The price-to-rent (PtR) ratio is one of the most commonly used indicators to assess housing market conditions by policy makers and real estate practitioners. It is often employed as an economic barometer to detect whether a housing bubble exists and determine whether the property market has become unaffordable relative to historical trends. Despite a plethora of research studies on the PtR ratio in the housing literature, relatively little is known about its long-term dynamics with macroeconomic and financial determinants. By utilising time series data on the Hong Kong residential property market, this study examines the cointegration and causal relationships between a wide spectrum of macroeconomic indicators and the PtR ratios of housing segments of different tiers which comprise different socioeconomic groups of homebuyers and investors. The results point towards market compartmentalisation, in the sense that the PtR ratios of the housing submarkets respond to changes in macroeconomic fundamentals in a differential manner. For instance, the PtR ratios of housing segments with a greater proportion of owner-occupiers are statistically less y correlated with investment-related macroeconomic attributes, such as foreign direct investment and equity market performance. On the other hand, the pricing of large-sized housing units in prime locations, generally favoured by investors from mainland China, are found to be Granger-caused by the exchange rate of the Chinese Yuan to the Hong Kong dollar.

Factors Affecting Spatial Autocorrelation in Residential Property Prices

Within housing literature, the presence of spatial autocorrelation (S.A.) in housing prices is typically examined horizontally in a two-dimensional setting. However, in the context of apartment buildings, there is also a vertical component of S.A. for housing units located on different floor levels. This paper therefore explores the determinants of both horizontal and vertical S.A. within residential property prices. First, we posit that S.A. in housing prices is a consequence of the price discovery process of real estate, in which property traders acquire price information from recent market transactions (i.e., comparables) to value a subject property. Furthermore, we contend that the extent to which property traders rely on comparables to determine housing prices is governed by the liquidity and volatility conditions of the market, which in turn affects the magnitude of the S.A. By developing and testing several spatial autoregressive hedonic models using open market transaction data for the Hong Kong residential property market, we find that market liquidity tends to increase both vertical and horizontal S.A., whilst market volatility is more prone to increase vertical S.A. but depress horizontal S.A.

Regional differentiation and trends in the development of the residential real estate market of the Leningrad Oblast

Subject. This article examines the main trends in the development of the residential property market at the regional level. Objectives. The article aims to analyze the land zoning of the activities of the residential property market on a geographical basis, that is, depending on the distance from the regional center, and assess the geographical distribution of housing quantity. Methods. For the study, I used the methods of statistical, comparative, and logical analyses. Results. The article determines which municipal districts of the Leningrad Oblast use their geographical potential effectively. It also shows the geographical distribution of housing quantity in the context of municipal districts and determines the total area of commissioned residential units. Conclusions. Currently, the adoption and implementation of housing construction development programmes, taking into account zoning activities in the real estate market, are relevant at the federal and regional levels. It is advisable to expand approaches to mortgage lending in the construction of residential facilities.

United Kingdom general elections and the impact on house prices

PurposeThe paper considers if house price movements in the United Kingdom (UK) can be linked to the political cycle as governments realise homeowners represent a large portion of the voter base and their voting decisions could be influenced by the magnitude and direction of house price changes. Specifically, this paper aims to investigate whether house prices behave differently before and after elections and under different political regimes.Design/methodology/approachThe paper analyses quarterly house price data from 1960 to 2018 together with data on UK parliamentary elections for the same period. Descriptive statistics and significance tests are used to analyse the impact of the political cycle on house price movements in the UK.FindingsWhile there is no evidence that house prices in the UK performed significantly differently under different political parties, the authors observed that house prices performed much better in the last year before an election compared to the first year after an election. On average, house prices increased by 5.3% per annum in the last year before an election compared to 1.3% per annum in the first year following an election.Research limitations/implicationsThe study highlights significant variations in the performance of UK house prices around election times.Practical implicationsIt is imperative that the political cycle is given adequate consideration when making residential property investment decisions.Social implicationsHouse buyers and investors in the residential property market could include the election timings as part of their decision-making process.Originality/valueThis paper represents a unique systematic examination of the influence of the political cycle on residential houses prices in the UK.

Impact of Induced Seismicity on the Housing Market: Evidence from Pohang

In this study, we analyze the case of induced seismicity in Pohang, South Korea, in 2017 to investigate the effect of seismic risk perception on the local residential property market. Based on a hedonic pricing model with a difference-in-differences method, we examine the geographic distribution of the effects of unexpected earthquake hazards. Our results indicate an overall reduction in local property values, but the magnitudes of negative externality for housing prices decrease with respect to the distance from the epicenter. In areas within 3 km of the epicenter, the asset value reduced by approximately 20% after an earthquake event, but if the distance from the epicenter was higher than 12 km, the negative effect on the price was not significant. In addition, we examine how the experience of seismic events affect the preference on the anti-seismic building structure. The results show that the market valuation on the anti-seismic system significantly escalated after the earthquake.

Sustainable Recovery? Deciphering Hungary’s Residential Property Market before the Pandemic

This paper develops some analytical perspectives for a proper assessment of the dynamics observed on the Hungarian residential property market over the last decade. These dynamics are examined in comparison to official policy objectives. On the one hand, sustainable development and social balance were particularly urgent issues after the last financial crisis. On the other, the residential property market was officially instrumentalised to achieve them. We examined real estate market processes using data from the Hungarian Central Statistical Office and found a change in investment motives and in the main groups of actors dominant in the market, and we also examined the role of foreign investment. At the aggregate national level, the past decade looks like a process of recovery. Nonetheless, the factors relevant for the observable dynamics do not seem to correspond to the goals also formulated in the new constitution, but rather document the investment fever of certain groups.

Customer preferences of modern technologies (PropTech) on the primary housing market

Introduction/background: The residential property market is in a state of constant flux, largely a consequence of the intensive development and increasing availability of modern technologies termed PropTech. Relatively resistant to change, the real estate sector is undoubtedly undergoing a technological revolution. PropTech affects the activities of entities that create both supply and services on the real estate market. In addition, it also affects the customer. Aim of the paper: The aim of the paper is to identify the attitudes and preferences of primary apartments buyers regarding the use of modern technology (PropTech) by developers in the local residential property market. Materials and methods: The tool was Internet survey questionnaire. Originally, a face-to-face study was planned, but due to the constraints of the pandemic, it was not possible to reach respondents directly. In some cases, the “snowball” method was also used to increase the sample size. Results and conclusions: The preference surveys that have been conducted and presented are a contribution to further research work in this area. The results obtained show that the most popular solutions are those that are relatively easy to achieve and do not pose a great challenge to developers, for example. In contrast, those related to digital tools came in last place. Further questions also arise. To what extent, in a situation of relatively expensive housing, are buyers willing to pay for modern solutions. Environmental awareness, such as the use of solar energy or rainwater harvesting, may be at odds with the purchasing capacity of households. To what extent can buyers trust modern technologies without worrying about, for example, lack of energy to use appliances. These and probably other questions require further research in this area. Keywords: PropTech, customer preference, residential market, housing market, real estate.

The impact of the COVID-19 pandemic on the residential real estate market on the example of Szczecin, Poland

The aim of this article is to assess the impact of the socio-economic situation caused by the COVID-19 pandemic on the residential property market. Research in this area has been conducted all over the world. The conclusions of these studies are inconclusive. In different countries and different cities, the changes in the property markets observed from 2020 onwards differ. These differences concern both prices and the number of transactions. In this situation, it is important to conduct research in as many markets as possible. Summaries of such research will allow certain patterns to be identified, which will provide a global perspective on how the COVID-19 pandemic has affected the property market. The paper describes the short-term changes that have occurred in the formation of residential property prices and the number of transactions concluded. Separate analyses were conducted for property sales and rental transactions. The research was carried out on the data of over 5000 transactions in one of the biggest Polish cities - Szczecin. The city is divided administratively into four districts, which was also taken into account in the study. This made it possible to assess whether, just as the impact of the pandemic varied between cities and countries, it also varied at district level within one city. Confirming the diversity of impact will allow conclusions to be drawn as to whether the pandemic affects each market equally or whether different property markets are affected differently by restrictions and changes in the decisions of property market participants.

An Analysis of the Income and Price Elasticity of Demand for Housing in View of Price Dynamics on the Residential Property Market

Abstract In both the global and the domestic approach, the real estate market is a multifaceted domain of study, constituting a specific and imperfect system. Researchers have to rely on increasingly advanced analytical tools to capture the structural complexity of real estate markets. Real estate prices are influenced by contradictory behaviors of market participants. This observation prompted the authors to analyze the income and price elasticity of demand for housing by calculating elasticity coefficients in view of changes in housing prices and the Veblen effect. This problem was analyzed based on a review of the literature and the results of an experiment. The results of the current study can be used to confirm the presence of the Veblen effect on the housing market based on the adopted criteria. The coefficients of price and income elasticity of demand for housing were calculated in view of the price dynamics on the real estate market to paint a more complete picture of reality and explain market processes.

A DYNAMIC RELATIONSHIP BETWEEN CONSUMER CONFIDENCE AND RESIDENTIAL PROPERTY PRICE: EMPIRICAL EVIDENCE FOR MALAYSIA

In recent years, the real estate market has become a major interest for economists and researchers. In general, property prices are influenced by the supply and demand of the real estate market. In addition to the individual's positive expectation of the real estate market would raise the demand for housing and hence, house price indexes would increase. This study provides new knowledge on how consumer confidence in the housing industry affects residential property prices in Malaysia. Previous studies on the effect of consumer perception towards residential property in Malaysia are scarce. Therefore, the objective of this study is to determine how consumer confidence affect residential property price in Malaysia. Our study differs by focusing on the effect of consumer confidence on the housing industry and macroeconomic drivers toward residential property prices in Malaysia over the period 2004:Q1 to 2018:Q4. By using the autoregressive distributed lag (ARDL) test, the empirical results have shown the presence of long-run adjustment and indicate that consumer confidence towards the housing industry and many macroeconomic variables significantly affect residential property prices. From this finding, we have suggested that government and policymakers should be able to understand consumer confidence in the housing industry to increase consumer satisfaction and to improve consumer sentiment towards the residential property market in Malaysia.

The landlord-tenant problem and energy efficiency in the residential rental market

The aim of this paper is to test for the persistence of the landlord-tenant energy efficiency problem in the residential rental property market in the presence of information on property energy performance. To do this, we compare the efficiency of rental and non-rental properties using a combination of Coarsened Exact Matching (CEM) and parametric regression. We use a sample of 585,578 residential properties in the Republic of Ireland - a region that legally requires rental properties to display energy performance certificates when advertised. The findings suggest that the landlord-tenant problem is present in the Irish rental market but that it is not uniform across locations, indicating the influence of other factors. To explore this further, we exploit the regional variation in rental property prices. We find a larger difference between rental and non-rental properties’ energy efficiency in markets with scarcity in rental property supply. In addition, we are able to take advantage of a unique trait in building design to compare rental and non-rental properties which were identical at the time of their construction. The findings from this sub-group mirror our finding for the sample as a whole.

How Does Residential Property Market React to Flood Risk in Flood-Prone Regions? A Case Study in Nagoya City

To quantify the flood risk awareness of real estate market participants and residents, previous studies analyzed the effect of flood risks on residential property values. However, most studies focused on the impact of recent flood events and the publication of new flood risk information; the behavior in flood-prone regions in which repeated damages occurred and lessons learned consequently has not been the focus of analysis. Moreover, there is a growing national concern in Japan about an increase in future flood risks due to climate change, although their effect on property values has not been discussed. In this study, we analyzed residential property values in Nagoya City (Aichi Prefecture, Japan), a megacity that has experienced significant flood damage in major historical and recent floods. The main objective of this study is to determine the effects of past and recent flood experiences and the increasing concerns about flood risks on recent residential property values. The results revealed that historical flood damage had the largest impact on residential property values in Nagoya City, and devaluation increased due to growing concerns about natural disasters in Japan. The disclosure of flood risk information also had an impact on property values, increasing devaluation after disclosure. On the contrary, the occurrence of recent floods did not have an impact on property values, suggesting that flood risk awareness had already been strong in the target area. These findings are different from those of many previous studies. The observed trends in residential property values in the target area are likely a characteristic response in flood-prone regions, where flood risk awareness is enhanced due to repeated flood damage.

Limiting the distortionary effects of transaction taxes: Scottish stamp duty after the Mirrlees Review

AbstractWe investigate the distortionary effects of transaction taxes through a case study of the Scottish residential property market. We make use of four sources of variation in transaction tax rates present in recent Scottish tax systems: (1) jumps in tax liabilities at tax thresholds; (2) jumps in marginal tax rates at thresholds; (3) a tax announcement that created temporary tax saving opportunities; and (4) a shift to a more progressive transaction tax regime. Our results indicate that market participants are highly responsive to tax changes and are willing to change the price and timing of transactions when tax savings opportunities are present. We also find that progressive reform had a significant positive effect on transaction activity in the market segment where tax rates were reduced. However, the higher end of the market, where tax rates increased, was mostly unaffected by progressive reform, with the exception of the market for very expensive properties, where a negative effect is identified. Implications of our findings are that if governments want to make transaction tax regimes more efficient, progressive taxation might be a good way to limit distortionary effects, whilst also encouraging transaction activity in the lower end of the market.