A demonstration of sustainability arguments using house price data
Tom Kauko, Department of Geography,
NTNU, Trondheim, Norway
ERES Conference, 3-6 July, 2013, Vienna, Austria.
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.
Environmental-ecologic sustainability
Social-cultural sustainability
Economic -financialsustainability
The current theory of sustainability
Sustainability aspects relevant for urban real estate development
1. Energy efficiency in buildings 2. Use of renewable energy in buildings 3. Pollution control in building4. Real estate quality5. Real estate affordability6. Real estate diversity7. Optimal density for a block/neighbourhood8. Public transportation availability 9. Traffic pollution 10. Social cohesion in the neighbourhood/city/region11. Communicativeness in local/regional planning 12. Innovativeness of the region
Urban property development – how sustainable?The right mix of investment and regulation fosters
1. Quality2. Affordability3. Diversity (evolutionary argument)
OBS: Budapest is more affected by the global crisis than other European cities!
Environment Economy SocialQuality X XAffordability X XDifferentiation X X X
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!
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”
1. N-dimensional observation
vector
SOM
’Winner’
N-dimensional responsevectors
2.
3x2 map
(1,0)
(0,1) (1,1)
(2,0)
(2,1)
(0,0)
(0,2) (1,2) (2,2)
(3,0)
(3,2)
(3,1)
4x3 map
(1,0)
(0,1) (1,1)
(2,0)
(2,1)
(0,0)
2000
2002
2001
2003
Example of layer:single-family price/sqm
2004
2005
2006
2007
2008
2009
High price areas – how sustainable are they?
To find out we need field inspection
LEISURE AMENITIES(exclusively for residents and their guests)Fitness CenterSauna, solariumThermal water poolPrivate swimming poolHydro-, medical-, recreational massageAqua - fitness, step - aerobicSquash courtsMedical control (sport medic)Billiard and game roomLibrarySun Patio with secure playgroundRooftop GardenEXCEPTIONAL AMENITIESMultifunctional rooms for eventsPrivate medical servicesShort-term rental apartments for visiting guestsFresh flower deliveryApartment services for absentee owners (e.g. attending topets, plants)Technical repair service on callCleaning service"Boy"-service (e.g. shopping, general assistance)Restaurant with room serviceWine cellars with individual lockersCigar cornerShops and connected services
BUILDING SAFETY AND SECURITY24-hour reception desk serviceClosed-circuit video surveillance system in common areasControlled access via sophisticated entry system withcoded cards and limited zonesCentralized monitoring of individual apartment securitysystemsSpecial security doors to all apartmentsComputerized fire alarm systemMonitored residential parking with sprinkler system, COdetector
FindingsThe 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
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