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Changes in the Hedonic Valuation of Amenities and Characteristics in Post-pandemic Residential Property Markets

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  • Shiwen Xu

Abstract

This study examines whether the COVID-19 pandemic led to lasting shifts in residential housing valuation in the UK, focusing on Greater London and seven major cities. The following questions are addressed: a) Was this change in residential valuations temporary, or is it likely to be permanent? b) For what other characteristics do we see a fundamental shift in valuation by home buyers? c) Did seven other cities follow a consistent change with Greater London? Using transactions data for more than 1.5 million house sales from 2017 to 2023, and detailed neighborhood information, we find a persistent flattening of the CBD-distance price gradient: by 7.7% (from -0.683 to -0.63) in Greater London and 9.6% (from -0.135 to -0.122) in major UK cities. An event study confirms the change is stable over time. Hedonic price models show that this effect holds after controlling for amenities, with post-pandemic buyers placing greater emphasis on school quality and property type. Notably, demand shifts toward large homes, with premiums rising for terraced, detached, and semi-detached houses, and falling for apartments (flats). Effects of crime and density vary by region, showing stronger negative valuation in London and weaker or even positive effects elsewhere.

Suggested Citation

  • Shiwen Xu, 2025. "Changes in the Hedonic Valuation of Amenities and Characteristics in Post-pandemic Residential Property Markets," CESifo Working Paper Series 11996, CESifo.
  • Handle: RePEc:ces:ceswps:_11996
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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