IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i5p2963-d513330.html
   My bibliography  Save this article

Reflecting the Sustainability Dimensions on the Residential Real Estate Prices

Author

Listed:
  • Marilena Mironiuc

    (Accounting, Business Information Systems and Statistics Department, Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iași, 700505 Iași, Romania)

  • Elena Ionașcu

    (Department of Financial and Economic Analysis and Valuation, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, 010374 Bucharest, Romania)

  • Maria Carmen Huian

    (Accounting, Business Information Systems and Statistics Department, Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iași, 700505 Iași, Romania)

  • Alina Țaran

    (Department of International Trade and Business, Faculty of Business Administration, Haliç University, Istanbul 34445, Turkey)

Abstract

The paper analyzes the reaction of residential property prices to sustainability attributes and the extent to which they capitalize the effects of sustainability on real estate markets in EU-28 countries in the period 2000–2018. Given that the sustainable real estate market is mainly driven by demand, the sustainability attributes included in the study reflect both buyers’ expectations and their investment potential in sustainable residential properties, and developers’ efforts to become more “sustainable” through responsible property investment. In order to correspond to the current meaning of sustainable development, the variables capture the four dimensions that give content to the concept of the quadruple bottom line: economic, social, environmental and institutional. Using panel data and the two-stage least squares (2SLS) method, the research reveals a pronounced sensitivity of residential property prices to all sustainability dimensions in countries considered leaders in implementing the Sustainable Development Goals (SDGs), characterized by a strong institutional environment, and efficient and transparent real estate markets. In countries less committed to SGD implementation, weak governance and higher corruption negatively affect the transparency of real estate markets, and the dynamics of the price of residential transactions are determined only by the economic and social dimensions of sustainability.

Suggested Citation

  • Marilena Mironiuc & Elena Ionașcu & Maria Carmen Huian & Alina Țaran, 2021. "Reflecting the Sustainability Dimensions on the Residential Real Estate Prices," Sustainability, MDPI, vol. 13(5), pages 1-28, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:5:p:2963-:d:513330
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/5/2963/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/5/2963/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brent W. Ambrose & Piet Eichholtz & Thies Lindenthal, 2013. "House Prices and Fundamentals: 355 Years of Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(2-3), pages 477-491, March.
    2. Katherine Kiel & Michael Williams, 2005. "The Impact of Superfund Sites on Local Property Values: Are All Sites the Same?," Working Papers 0505, College of the Holy Cross, Department of Economics.
    3. Paloma Taltavull de La Paz & V. Raul Perez-Sanchez & Raul-Tomas Mora-Garcia & Juan-Carlos Perez-Sanchez, 2019. "Green Premium Evidence from Climatic Areas: A Case in Southern Europe, Alicante (Spain)," Sustainability, MDPI, vol. 11(3), pages 1-29, January.
    4. Paloma Taltavull de La Paz & Laura Gabrielli, 2015. "Housing Supply and Price Reactions: A Comparison Approach to Spanish and Italian Markets," Housing Studies, Taylor & Francis Journals, vol. 30(7), pages 1036-1063, October.
    5. Helliwell, John F. & Huang, Haifang, 2008. "How's Your Government? International Evidence Linking Good Government and Well-Being," British Journal of Political Science, Cambridge University Press, vol. 38(4), pages 595-619, October.
    6. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    7. Ju Liu & Bo Bengtsson & Helena Bohman & Karin Staffansson Pauli, 2020. "A System Model and An Innovation Approach toward Sustainable Housing Renovation," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    8. Ducksu Seo & You Seok Chung & Youngsang Kwon, 2018. "Price Determinants of Affordable Apartments in Vietnam: Toward the Public–Private Partnerships for Sustainable Housing Development," Sustainability, MDPI, vol. 10(1), pages 1-17, January.
    9. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    10. Alessio Ciarlone, 2015. "House price cycles in emerging economies," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 32(1), pages 17-52, March.
    11. Hassani, Hossein & Yeganegi, Mohammad Reza & Gupta, Rangan, 2019. "Does inequality really matter in forecasting real housing returns of the United Kingdom?," International Economics, Elsevier, vol. 159(C), pages 18-25.
    12. John M. Quigley, 1999. "Real Estate Prices and Economic Cycles," International Real Estate Review, Global Social Science Institute, vol. 2(1), pages 1-20.
    13. Coro Chasco & Julie Le Gallo, 2015. "Heterogeneity in Perceptions of Noise and Air Pollution: A Spatial Quantile Approach on the City of Madrid," Spatial Economic Analysis, Taylor & Francis Journals, vol. 10(3), pages 317-343, September.
    14. Michela Scatigna & Robert Szemere & Kostas Tsatsaronis, 2014. "Residential property price statistics across the globe," BIS Quarterly Review, Bank for International Settlements, September.
    15. Denise DiPasquale & William C. Wheaton, 1992. "The Markets for Real Estate Assets and Space: A Conceptual Framework," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(2), pages 181-198, June.
    16. Mr. Paul Louis Ceriel Hilbers & Angana Banerji & Haiyan Shi & Mr. Willy A Hoffmaister, 2008. "House Price Developments in Europe: A Comparison," IMF Working Papers 2008/211, International Monetary Fund.
    17. Manuchehr Irandoust, 2019. "House prices and unemployment: an empirical analysis of causality," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 12(1), pages 148-164, February.
    18. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
    19. 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..
    20. repec:mcb:jmoncb:v:45:y:2013:i::p:477-491 is not listed on IDEAS
    21. Nepal, Mani & Rai, Rajesh K. & Khadayat, Madan S. & Somanathan, E., 2020. "Value of cleaner neighborhoods: Application of hedonic price model in low income context," World Development, Elsevier, vol. 131(C).
    22. Murteza Sanjarani Pour & Parviz Nasir Khani & Gholamreza Zamanian & Kamran Barghandan, 2013. "Specifying The Effective Determinants Of House Price Volatilities In Iran," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 11(2), pages 15-20.
    23. Eloisa T. Glindro & Tientip Subhanij & Jessica Szeto & Haibin Zhu, 2011. "Determinants of House Prices in Nine Asia-Pacific Economies," International Journal of Central Banking, International Journal of Central Banking, vol. 7(3), pages 163-204, September.
    24. Elena IONASCU & Marilena MIRONIUC & Ion ANGHEL, 2018. "Housing market dynamic in central and eastern european countries: a comparative study," The Valuation Journal, The National Association of Authorized Romanian Valuers, vol. 13(1), pages 35-77.
    25. Charles Himmelberg & Christopher Mayer & Todd Sinai, 2005. "Assessing High House Prices: Bubbles, Fundamentals and Misperceptions," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 67-92, Fall.
    26. Matlack, Janna L. & Vigdor, Jacob L., 2008. "Do rising tides lift all prices? Income inequality and housing affordability," Journal of Housing Economics, Elsevier, vol. 17(3), pages 212-224, September.
    27. Nicolas Philiponnet & Alessandro Turrini, 2017. "Assessing House Price Developments in the EU," European Economy - Discussion Papers 048, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    28. Hee-Hoon Kim & Seul-Ye Lim & Seung-Hoon Yoo, 2019. "Residential Consumers’ Willingness to Pay Price Premium for Renewable Heat in South Korea," Sustainability, MDPI, vol. 11(5), pages 1-14, February.
    29. Olga Filippova, 2009. "The influence of submarkets on water view house price premiums in New Zealand," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 2(1), pages 91-105, March.
    30. Daniel C. Matisoff & Douglas S. Noonan & Mallory E. Flowers, 2016. "Policy Monitor—Green Buildings: Economics and Policies," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 329-346.
    31. Lieve Fransen & Gino del Bufalo & Edoardo Reviglio, 2018. "Boosting Investment in Social Infrastructure in Europe," European Economy - Discussion Papers 074, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    32. Jon P. Nelson, 2008. "Hedonic Property Value Studies of Transportation Noise: Aircraft and Road Traffic," Springer Books, in: Andrea Baranzini & José Ramirez & Caroline Schaerer & Philippe Thalmann (ed.), Hedonic Methods in Housing Markets, chapter 3, pages 57-82, Springer.
    33. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    34. Ana-María Martínez-Llorens & Paloma Taltavull de La Paz & Raul-Tomas Mora-Garcia, 2020. "Effect of The Physical Characteristics of a Dwelling on Energy Consumption and Emissions: The Case of Castellón And Valencia (Spain)," Sustainability, MDPI, vol. 12(22), pages 1-20, November.
    35. DiPasquale, Denise, 1999. "Why Don't We Know More about Housing Supply?," The Journal of Real Estate Finance and Economics, Springer, vol. 18(1), pages 9-23, January.
    36. Mayer, Christopher J. & Somerville, C. Tsuriel, 2000. "Residential Construction: Using the Urban Growth Model to Estimate Housing Supply," Journal of Urban Economics, Elsevier, vol. 48(1), pages 85-109, July.
    37. Barbara Paterson & Anthony Charles, 2019. "Community-based responses to climate hazards: typology and global analysis," Climatic Change, Springer, vol. 152(3), pages 327-343, March.
    38. Andrea Baranzini & José Ramirez & Caroline Schaerer & Philippe Thalmann (ed.), 2008. "Hedonic Methods in Housing Markets," Springer Books, Springer, number 978-0-387-76815-1, September.
    39. M. Utku Ozmen & M. Koray Kalafatcilar & Erdal Yilmaz, 2019. "The impact of income distribution on house prices," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 19(2), pages 45-58.
    40. Tan, Teck Hong, 2011. "Measuring the willingness to pay for houses in a sustainable neighborhood," MPRA Paper 30446, University Library of Munich, Germany.
    41. Fuerst, Franz & McAllister, Patrick & Nanda, Anupam & Wyatt, Peter, 2015. "Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England," Energy Economics, Elsevier, vol. 48(C), pages 145-156.
    42. Kiel, Katherine A. & Williams, Michael, 2007. "The impact of Superfund sites on local property values: Are all sites the same?," Journal of Urban Economics, Elsevier, vol. 61(1), pages 170-192, January.
    43. Felipe Encinas & Carlos Aguirre & Carlos Marmolejo-Duarte, 2018. "Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market," Sustainability, MDPI, vol. 10(1), pages 1-26, January.
    44. Sommer, Kamila & Sullivan, Paul & Verbrugge, Randal, 2013. "The equilibrium effect of fundamentals on house prices and rents," Journal of Monetary Economics, Elsevier, vol. 60(7), pages 854-870.
    45. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    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. Elena IONAȘCU, 2019. "The Dynamic Relationship Between The Residential Real Estate Markets, Macro – Economy And Institutional Development: Evidence From Eu Countries," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6, pages 75-107.
    2. Ciarlone, Alessio, 2011. "Housing wealth effect in emerging economies," Emerging Markets Review, Elsevier, vol. 12(4), pages 399-417.
    3. Alessio Ciarlone, 2012. "Wealth effects in emerging economies," Temi di discussione (Economic working papers) 843, Bank of Italy, Economic Research and International Relations Area.
    4. Alessio Ciarlone, 2015. "House price cycles in emerging economies," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 32(1), pages 17-52, March.
    5. 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.
    6. Cordera, Ruben & Chiarazzo, Vincenza & Ottomanelli, Michele & dell’Olio, Luigi & Ibeas, Angel, 2019. "The impact of undesirable externalities on residential property values: spatial regressive models and an empirical study," Transport Policy, Elsevier, vol. 80(C), pages 177-187.
    7. Wang, Jianing & Lee, Chyi Lin, 2022. "The value of air quality in housing markets: A comparative study of housing sale and rental markets in China," Energy Policy, Elsevier, vol. 160(C).
    8. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    9. Hertrich Markus, 2019. "A Novel Housing Price Misalignment Indicator for Germany," German Economic Review, De Gruyter, vol. 20(4), pages 759-794, December.
    10. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 1-22, May.
    11. Kurt Hafner, 2008. "The pattern of international patenting and technology diffusion," Applied Economics, Taylor & Francis Journals, vol. 40(21), pages 2819-2837.
    12. John Muellbauer, 2012. "When is a Housing Market Overheated Enough to Threaten Stability?," RBA Annual Conference Volume (Discontinued), in: Alexandra Heath & Frank Packer & Callan Windsor (ed.),Property Markets and Financial Stability, Reserve Bank of Australia.
    13. Can Zou & Jun Tai & Li Chen & Yue Che, 2020. "An Environmental Justice Assessment of the Waste Treatment Facilities in Shanghai: Incorporating Counterfactual Decomposition into the Hedonic Price Model," Sustainability, MDPI, vol. 12(8), pages 1-12, April.
    14. Aladejare, Samson Adeniyi, 2022. "Natural resource rents, globalisation and environmental degradation: New insight from 5 richest African economies," Resources Policy, Elsevier, vol. 78(C).
    15. Yongsheng Jiang & Dong Zhao & Andrew Sanderford & Jing Du, 2018. "Effects of Bank Lending on Urban Housing Prices for Sustainable Development: A Panel Analysis of Chinese Cities," Sustainability, MDPI, vol. 10(3), pages 1-16, February.
    16. Umut Uzar, 2022. "The connection between freedom of the press and environmental quality: An investigation on emerging market countries," Natural Resources Forum, Blackwell Publishing, vol. 46(1), pages 21-38, February.
    17. Ya-Ling Chiu & Jiangze Du & Jying-Nan Wang, 2022. "The Effects of Price Dispersion on Sales in the Automobile Industry: A Dynamic Panel Analysis," SAGE Open, , vol. 12(3), pages 21582440221, August.
    18. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    19. Kentaka Aruga, 2019. "Investigating the Energy-Environmental Kuznets Curve Hypothesis for the Asia-Pacific Region," Sustainability, MDPI, vol. 11(8), pages 1-12, April.
    20. Jeetendra Khadan & Amrita Deonarine, 2019. "Testing the Inter-temporal Budget Constraint for Small States," Economics Bulletin, AccessEcon, vol. 39(2), pages 1176-1183.

    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:gam:jsusta:v:13:y:2021:i:5:p:2963-:d:513330. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.