A demonstration of sustainability arguments using house price data

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A demonstration of sustainability arguments
using house price data
ERES Conference, 3-6 July, 2013, Vienna, Austria.

•  Tom Kauko, Department of Geography, NTNU,
  Trondheim, Norway

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Intro

• The aim is to demonstrate sustainability
  arguments using house price data with particular
  emphasis on CEE circumstances
• Analysis of house price and turnover data on
  Budapest, Hungary, for the period 2000-09 (SOM,
  fixed time-windows) field inspection of upper
  market cases interviews of academic, non
  government, public and private sector experts
• A variety of locations and typical market
  segments
• The findings suggest that sustainable innovation
  features are largely absent in this period,
  although future markets are likely to be
  different in this respect.

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The current theory of sustainability
Environmental -ecologic sustainability
Economic -financial sustainability
Social-cultural sustainability
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Sustainability aspects relevant for urban real
estate development

• 1. Energy efficiency in buildings
• 2. Use of renewable energy in buildings
• 3. Pollution control in building
• 4. Real estate quality
• 5. Real estate affordability
• 6. Real estate diversity
• 7. Optimal density for a block/neighbourhood
• 8. Public transportation availability
• 9. Traffic pollution
• 10. Social cohesion in the neighbourhood/city/regi
  on
• 11. Communicativeness in local/regional planning
• 12. Innovativeness of the region

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Urban property development how sustainable?

• The right mix of investment and regulation
  fosters
• 1. Quality
• 2. Affordability
• 3. Diversity (evolutionary argument)

Environment Economy Social
Quality X X
Affordability X X
Differentiation X X X
OBS Budapest is more affected by the global
crisis than other European cities!
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Developments in selected Hungarian municipalities

• The urban property development of Budapest is
  private driven
• Development activity has spread outside cities to
  former industrial areas, logistics centers,
  villages and Greenfield sites.
• Even amidst such harmful tendencies,
  sustainability is gaining more importance in this
  country too
• We are looking for smaller, niche developers and
  a demand driven approach!

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Property value creation and price setting (1)
Lack of an unsustainability discount
(exception energy costs of homes) (2)
Unrealistic price-setting by the seller in a
consumers market (falling demand oversupply,
e.g. Residential parks). (3) Political issues
Changes in land ownership and land use involve
political and lobbying practices corruption too
that are extremely unsustainable (4) The
mismatch between the prices paid for land at the
height of the boom and prices expected from the
sales or leases of the completed floor-spaces
We expect that all sorts of things will increase
the value some of them are sustainable
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2000
2001
Example of layer single-family price/sqm
2002
2003
High price areas how sustainable are they?
To find out we need field inspection
2004
2005
2006
2007
2008
2009
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LEISURE AMENITIES (exclusively for residents and
their guests) Fitness Center Sauna,
solarium Thermal water pool Private swimming
pool Hydro-, medical-, recreational massage Aqua
- fitness, step - aerobic Squash courts Medical
control (sport medic) Billiard and game
room Library Sun Patio with secure
playground Rooftop Garden EXCEPTIONAL
AMENITIES Multifunctional rooms for
events Private medical services Short-term rental
apartments for visiting guests Fresh flower
delivery Apartment services for absentee owners
(e.g. attending to pets, plants) Technical repair
service on call Cleaning service "Boy"-service
(e.g. shopping, general assistance) Restaurant
with room service Wine cellars with individual
lockers Cigar corner Shops and connected services
BUILDING SAFETY AND SECURITY 24-hour reception
desk service Closed-circuit video surveillance
system in common areas Controlled access via
sophisticated entry system with coded cards and
limited zones Centralized monitoring of
individual apartment security systems Special
security doors to all apartments Computerized
fire alarm system Monitored residential parking
with sprinkler system, CO detector
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Findings

• The SOM analysis
• In Budapest contain relatively high priced cases
  and cases with high turnover were found in very
  specific places
• However, the composition of almost all high price
  cases change every year e.g. One year the
  highest price is for historic inner city and the
  next it is in suburbia
• The field inspection (upper/upper-average market
  cases)
• Within the high price segments 15 cases were
  picked most of them fall short of many
  sustainability criteria
• One or two cases may be evaluated as sustainable
  this is largely due to the cultural dimension
• Often also mixed nature of the developments and
  green too and reasonably good public
  transport accessibility
• Disappointing is a lack of innovativeness
  sustainability

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Conclusions

• Depending on the selection of data/variables it
  is possible to illustrate differences in urban
  structure using the SOM
• However, while it is relatively easy to
  illustrate price premiums it is far more
  difficult to relate them to any sustainability
  factors
• Budapest comprise an interesting case due its
  huge contrasts
• The necessary field inspection confirms that, of
  all possible sustainability elements, only the
  cultural dimension is strongly present other
  elements associated with sustainability (mixed,
  green, public transport) show up sporadically
• The new stock is not as diverse as the old stock
• Innovativeness is absent within this context
  however, in the future markets the situation may
  change