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The impact of residential development on nearby housing prices

Author

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  • Antti Tapio Kurvinen
  • Jaakko Vihola

Abstract

Purpose - Even as multi-story apartment building development proposals in existing neighbourhoods represent a substantial component of policy debate at local planning boards, there is limited evidence for the impact of such residential developments on surrounding apartment values. This paper aims to address the void in knowledge, and the impact of multi-story apartment building developments on apartment values in residential high-rise areas located outside city and district centres is investigated in Helsinki Metropolitan Area, Finland. Design/methodology/approach - Whether a multi-story apartment building development is followed by an increase in housing values depends on both positive and negative externalities. To specify valuation effects of proximate development projects, advanced research design combining matched sample methodology and hedonic-based difference-in-difference approach is used. Findings - It appears from the analysis that completion of a single multi-story apartment building has an immediate positive impact on apartment values within 300 metre radius, while there is no statistically significant impact on price trend. Research limitations/implications - This paper studies apartment values only in Helsinki Metropolitan Area, Finland, and it is important to notice that local regulations and market conditions may have a notable impact on the outcomes. Originality/value - This study is the first of its kind to provide with statistically significant evidence for positive impacts from multi-story apartment building development in Finnish residential high-rise areas and may have a crucial role in helping to dispel prejudices related to such developments.

Suggested Citation

  • Antti Tapio Kurvinen & Jaakko Vihola, 2016. "The impact of residential development on nearby housing prices," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 9(4), pages 671-690, October.
    • Handle: RePEc:eme:ijhmap:v:9:y:2016:i:4:p:671-690
    DOI: 10.1108/IJHMA-10-2015-0069
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    Citations

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    Cited by:

    1. Ismail, Mohammad & Wilhelmsson, Mats, 2022. "New housing investments' effects on gentrification and affordability in Stockholm, Sweden," Working Paper Series 22/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    2. Peng, Ying & Tian, Chuanhao, 2022. "Removal and reconstruction: Multi-period price effects on nearby housing from urban village redevelopment," Land Use Policy, Elsevier, vol. 113(C).
    3. Nan-Yu Wang & Jen-Yu Lee & Chih-Jen Huang, 2022. "The Effect of the Principal Component Index for Housing Quality Satisfaction on Housing Price: Urban vs. Rural Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(10), pages 1-63, October.

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