IDEAS home Printed from https://ideas.repec.org/p/lre/wpaper/lares_2014_923-1215-1-dr.html
   My bibliography  Save this paper

Using GIS to Measure the Impact of the Canterbury earthquakes on House Prices in Christchurch, NZ

Author

Listed:
  • Sandy Bond
  • Sofia Dermisi

Abstract

The Christchurch area in New Zealand (NZ) experienced two significant earthquakes on September 4th, 2010 (7.1R) and February 22nd, 2011 (6.3R) with a devastating impact to both houses and land. Negative media attention to the potential financial risks of living near or on the new Technical Category 3 (TC3) land or on land in a flood zone has fuelled the perception of uncertainty over the negative property value impacts. However, the extent to which such attitudes are reflected in lower property values affected by these land categories is controversial.This paper outlines research to identify attitude changes based on the sale price patterns as well as the relationship between sale prices and house characteristics before and after both of the earthquakes. We take a three-step approach by applying: a) an average trend analysis, b) GIS hot-spot analysis to identify possible spatial differentiations between the before and after effects of the earthquakes and, c) hedonic modeling to quantify the effect of house characteristics on sale price while controlling for and comparing, three land zones (TC1 to TC3).The data suggests that average sale prices increased after both quakes in TC1 and TC2 rather than TC3 zones. GIS hot-spot results on house valuations provide evidence of limited differentiations after the two earthquakes compared to the before trends for Christchurch. In contrast, differentiations exist after the second earthquake in Selwyn for one of the TC1 zones as well as for a TC2 zone of the Waimakariri district after both earthquakes. The econometric modeling suggests that higher sale prices are achieved by: newer houses across all land zones and more recent sale agreements only in TC1 and TC2 zones. Other observations include the negative effect of exterior façade material such as fibrolite on sale prices on the overall dataset as well as the individual TC1 and TC3 zone, while mixture and roughcast have a positive effect. The roofing materials explored tend to have a diverse rather than a homogenous effect on sale prices. In conclusion, the results suggest that although caution might exist for the TC3 zone the quality of the house can overcome the media stigma attached to the TC3 zones.

Suggested Citation

  • Sandy Bond & Sofia Dermisi, 2014. "Using GIS to Measure the Impact of the Canterbury earthquakes on House Prices in Christchurch, NZ," LARES lares_2014_923-1215-1-dr, Latin American Real Estate Society (LARES).
    • Handle: RePEc:lre:wpaper:lares_2014_923-1215-1-dr
    as

    Download full text from publisher

    File URL: https://lares.architexturez.net/doc/lares-2014-923-1215-1-dr
    Download Restriction: no
    File URL: https://lares.architexturez.net/system/files/LARES_2014_923-1215-1-DR.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John C. Whitehead & Subhrendu K. Pattanayak & George L. Van Houtven & Brett R. Gelso, 2008. "Combining Revealed And Stated Preference Data To Estimate The Nonmarket Value Of Ecological Services: An Assessment Of The State Of The Science," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 872-908, December.
    2. Temitope Egbelakin & Suzanne Wilkinson & Regan Potangaroa & Jason Ingham, 2011. "Enhancing seismic risk mitigation decisions: a motivational approach," Construction Management and Economics, Taylor & Francis Journals, vol. 29(10), pages 1003-1016.
    3. Thomas O. Jackson, 2001. "Environmental Risk Perceptions of Commercial and Industrial Real Estate Lenders," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 271-288.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Mats Wilhelmsson, 2000. "The Impact of Traffic Noise on the Values of Single-family Houses," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 43(6), pages 799-815.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sanglim Yoo & John E. Wagner, 2016. "A review of the hedonic literatures in environmental amenities from open space: a traditional econometric vs. spatial econometric model," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 20(1), pages 141-166, March.
    2. Kopsch, Fredrik, 2016. "The cost of aircraft noise – Does it differ from road noise? A meta-analysis," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 138-142.
    3. Adelina Gschwandtner & Jose Eduardo Ribeiro & Cesar Revoredo-Giha & Michael Burton, 2021. "Combining Stated and Revealed Preferences for valuing Organic Chicken Meat," Studies in Economics 2113, School of Economics, University of Kent.
    4. Wilhelmsson, Mats, 2002. "Household Expenditure Patterns for Housing Attributes: A Linear Expenditure System with Hedonic Prices," Journal of Housing Economics, Elsevier, vol. 11(1), pages 75-93, March.
    5. Dennis Guignet & Anna Alberini, 2015. "Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the United Kingdom," Risk Analysis, John Wiley & Sons, vol. 35(3), pages 501-517, March.
    6. Dennis Guignet & Anna Alberini, 2013. "Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK," Working Papers 2013.67, Fondazione Eni Enrico Mattei.
    7. Lipscomb, Clifford & Wang, Yongsheng & Kilpatrick, Sarah J., 2012. "Unconvensional Shale Gas Development and Real Estate Valuation Issues," The Review of Regional Studies, Southern Regional Science Association, vol. 42(2), pages 161-175, Summer.
    8. Daniel J. Phaneuf & Laura O. Taylor & John B. Braden, 2013. "Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach," Land Economics, University of Wisconsin Press, vol. 89(1), pages 30-52.
    9. Janmaat, John A, 2007. "Factors Affecting Residential Property Values in a Small Historic Canadian University Town," MPRA Paper 6145, University Library of Munich, Germany.
    10. Mats Wilhelmsson, 2022. "About the Importance of Planning the Location of Recycling Stations in the Urban Context," Sustainability, MDPI, vol. 14(13), pages 1-18, June.
    11. Wilhelmsson, Mats, 2008. "House price depreciation rates and level of maintenance," Journal of Housing Economics, Elsevier, vol. 17(1), pages 88-101, March.
    12. Henrik Andersson, 2008. "Willingness to Pay for Car Safety: Evidence from Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 579-594, December.
    13. Sofia B. Villas‐Boas & Céline Bonnet & James Hilger, 2021. "Random Utility Models, Wine and Experts," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 663-681, March.
    14. Stephen Gibbons & Susana Mourato & Guilherme Resende, 2014. "The Amenity Value of English Nature: A Hedonic Price Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(2), pages 175-196, February.
    15. Andreas Mense & Konstantin Kholodilin, 2014. "Noise expectations and house prices: the reaction of property prices to an airport expansion," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 763-797, May.
    16. Aarland, Kristin & Osland, Liv & Gjestland, Arnstein, 2017. "Do area-based intervention programs affect house prices? A quasi-experimental approach," Journal of Housing Economics, Elsevier, vol. 37(C), pages 67-83.
    17. Sebastian Brandt & Wolfgang Maennig, 2012. "The impact of rail access on condominium prices in Hamburg," Transportation, Springer, vol. 39(5), pages 997-1017, September.
    18. Boris A. Portnov & Yakov Odish & Larissa Fleishman, 2005. "Factors Affecting Housing Modifications and Housing Pricing: A Case Study of Four Residential Neighborhoods in Haifa, Israel," Journal of Real Estate Research, American Real Estate Society, vol. 27(4), pages 371-408.
    19. Jonas Eliasson & Fredrik Kopsch & Svante Mandell & Mats Wilhelmsson, 2020. "Transport Mode and the Value of Accessibility–A Potential Input for Sustainable Investment Analysis," Sustainability, MDPI, vol. 12(5), pages 1-14, March.
    20. Vania Ceccato & Mats Wilhemson, 2011. "The impact of crime on apartment prices: evidence of Stockholm, Sweden," ERSA conference papers ersa10p1026, European Regional Science Association.

    More about this item

    Keywords

    Earthquakes; GIS; House Prices; Risk Perception; stigma;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lre:wpaper:lares_2014_923-1215-1-dr. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/laresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.