Single-family-house Splits and Their Spillover Effects on Nearby Home Prices

Using a national coverage micro dataset in the Netherlands that links house sales with single-family house (SFH) splits – a form of gentle densification where existing SFHs are subdivided into multiple units –, we present new evidence that a SFH split located within a 0-150 meter radius reduces nearby SFH sale prices by an average of 1.17%. This effect is consistent with disamenity effects (e.g., loss of privacy, local resource competition and aversions to different household types), imposed by new residents in SFH splits on the existing SFH residents. We also show that on average, an SFH split have no statistically significant effect on apartment sales and on only ground-floor low-rise apartment sales. This is likely stems from two key factors: the inherent structural design of apartment buildings and greater demographic homogeneity between apartment residents and new occupants of SFH splits. Finally, we demonstrate our findings are unlikely to be driven by the supply effects, as sales involving newly created units from SFH splits are rare in our dataset and no price effects are observed even for ground-floor low-rise apartment sales, which would be most susceptible to supply-side competition from SFH splits given their close substitutability.