Market Conditon

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The Queensland University of Technology

Research Week International Conference

4-8 July 2005

Brisbane, Australia

Conference Proceedings

Editor: A. C. Sidwell

July 2005


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Published by:

Queensland University of Technology

Australia

ISBN 1-74107-101-1


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FACTORS INFLUENCING MARKET VALUES OF

RESIDENTIAL PROPERTIES

J.I.C. Mbachu*1andN. Lenono 2

1Institute of Technology & Engineering (Wellington Campus), College of Sciences,

Massey University, New Zealand2School of Construction Economics & Management, University of the Witwatersrand,

South Africa

ABSTRACT

In a free-market economy, market forces and other factors influence the pricesbuyers are willing to pay for a listed property in the property market. In practice, theestimation of the market values of properties draws largely on heuristics or is madewithout due consideration to a holistic range of influential factors. In most instances,this has resulted in overpricing and a risky property market marked with ups anddowns. Consequently demand has been discouraged or erratic thereby impacting

negatively on the property business, the construction industry and the nationaleconomy. This paper presents the results of investigations into the factorsinfluencing the market values of residential properties in the Johannesburg CBD.The investigations were limited to the views expressed by members of the SouthAfrican Property Owners Association in Johannesburg who deal in property asdevelopers, investors, consultants and managers. The descriptive survey method was

used, which consisted of qualitative and quantitative data gathering usingunstructured interviews and structured questionnaires, respectively. Content analysesand the multi-attribute methods were used in the analyses of the research data.Results showed that location, market conditions, micro and macro economicdynamics and building features are the most influential factors affecting the marketvalues of residential properties in the Johannesburg CBD. The percentage relative

influences of these factors on residential property prices could be as much as 16.3,14.8, 14.6 and 14.4 percents, respectively. The relative influences of the underlyingsubcomponents under each broad category of factors are presented. Adjustment ofthe comparable sales records in line with the relative influences of the identifiedfactors in the establishment of the asking prices of property is recommended for acloser forecast of the prices buyers are willing to pay. This is expected to stimulate

demand and sales thereby improving the fortunes in the property business, theconstruction industry and the national economy.

Keywords:asking price, influential factors, property market, real estate, residential

property, valuation.

1* [email protected](corresponding author)

2 [email protected]


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Mbachu and Lenono

INTRODUCTION

REINZ (1986) defines the open market value of a listed property as the best price,

which the property may reasonably be expected to achieve by normal marketing

means at the date of appraisal. It assumes both a willing seller and a willing and

prudent buyer and a reasonable time to effect the sale, taking into account the natureof the property and the state of the market. This definition assumes a fair market

value. In practice, Mockrealty (2005) observes that a range of value is usually

established for the asking price of a listed property. At what price in the continuum a

property is actually sold depends on the market conditions. A slow market is a

buyers market, at which properties may languish on the market for some time and

offers may be few and far between. At the slow market condition, asking prices are

usually pitched at the lowest rung of the price range. The hot market condition is the

sellers market, during which properties could sell within a few days of being listed,

often marked with multiple offers. The asking price at this condition is pitched at the

upper range of the price continuum. On the other hand, the fair price prevails when

the market is steady or in transition.

A review of the current approaches to establishing the market value of residential

property in practice reveals three to five main methods, namely the direct capital

comparison, the investment, residual, profits and cost of replacement approaches.

Depending on the purpose, REINZ (1986) outlines four principal methods for

assessing the value of real estate: the sales comparison, summation, investment and

residual methods. However, Britton et al. (1989) observe that in practice the direct

value comparison is the most commonly used method in the assessment of the market

value of residential property.

In the comparison process, a valuer is engaged to forecast the market value of a listed

property. In doing this, the she or he judges what prices vendors generally would seek

and do obtain, and what choices purchasers would make. S/he must therefore assess

what is now or has recently been available in the market place and make comparisons

between them. Britton et al. (1989) argue that the availability and nature of

comparables provide the basis of whatever method of valuation is adopted, and

indeed, the choice of the method itself. The method of comparison works best if the

comparable properties are identical. However, every property is unique. The

assumption of similarity is therefore faulty, and introduces some elements of risks in

the appraisal process. This perhaps underlies the complexity of the process and the

inability to accurately estimate the open market value of a listed property on the primebasis of comparable sales data.

Furthermore, Parnham and Rispin (2000) observe that personal opinion or subjective

judgment is used in majority of the cases. In the sales comparison method of appraisal

which is most widely used, REINZ (1986) cautions that the method diminishes rapidly

in accuracy with the number of factors or adjustments that must be taken into account.

In addition to this shortcoming, Britton et al. (1989) point out the unreliability of the

use of past sales records with time. Most worrisome is the valuers bias in the

appraisal process. For instance, Diaz (2002) reports that when faced with information

overload, valuers use mental short cuts - called heuristics - in coming to their final


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Factors influencing market values of residential properties

decisions even when they adversely influence a valuation. Diaz observes that valuers

make preliminary judgments and then seek evidence that support them.

Several factors affect the market value of residential properties listed in the property

market. Turner (2004) identifies the general and specific drivers of residentialproperty values: population growth, level of development in the node, property use,

the size and condition of improvements on the site and the demand and supply in the

property class within the local real estate market. In addition, Meikle (2001) identifies

four sets of main determinants of house prices, namely, the supply of housing, the

supply of finance, the demand of housing, and the level of homebuilders /

homebuyers confidence. The supply of housing is most strongly influenced by the

volume of existing stock of dwellings available for sale, and less of new developments

and conversions. The supply of housing finance is influenced by the financial

circumstances of the average borrowers and to the lending requirements demanded by

lending institutions. On the other hand, the demand for housing is related to the

changes in the number of households seeking housing. This in turn is mainlyinfluenced by the population increases, size of household formations and regional

migration patterns.

Two main groups could be fitted to Mockrealtys (2005) list of the factors influencing

property market value. Specific or internal factors refer to the nature and condition of

the property, including structural condition, quality of the finishes, building services,

fixtures and fittings, and the level of major improvements needed. General or external

factors include prevailing economic and market conditions, marketing strategies

adopted and the experience of the real estate agent, as well as the motivation of the

seller. A motivated seller in this instance is a seller who is under pressing conditions

to make a quick deal even at prices below prevailing market price range. Typical

instance could be a seller who has already bought his or her next home or is relocating

to a new area, and who is under pressure to sell the home quickly or face the prospect

of making two mortgage payments at the same time. Other instances include divorce

and financial distress. Royal lePage (2003) emphasises strongly on location and type

of mortgage debt financing as principal factors affecting the market value of listed

property. Location has a major influence in terms of proximity to centres of interest,

traffic congestion, crime levels, level of cleanliness or scenic beauty of the

environment, infrastructure services and social amenities, security, planning laws, etc.

On the other hand, the type of mortgage can affect the property value either up or

down depending on the amount, terms and conditions applicable, rates of interests andmethod of repayment.

There is the need to carefully consider the critical factors affecting market value of a

property to be listed in the property market in order to guard against over-pricing. This

is because when properties are overpriced, affordability levels are lowered and

demand is seriously affected. This could introduce depression in the property market.

The property sector is a major consumer of the products and services of the

construction industry (Mbachu, 2003). A depression in the property market translates

more dramatically to down-turn in the construction industry. This also has a rippling

effect on the economy due to the effect on the GDP and the consumer price index.


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Mbachu and Lenono

Consequently, establishing the right asking price at which buyers are willing to pay

holds numerous benefits. Royal lePage (2003) argues that if the right marketing

strategies are in place, pricing right is good for the seller and the property market in

the following ways: 1) the property sells faster because it is exposed to more qualified

buyers; 2) the property does not lose its marketability; 3) the closer to the market

value the higher the offers; 4) a well priced property can generate competing offers; 5)the property market comes alive with stimulated demand.

A review of related literature to date has revealed a listing of several factors affecting

the market value of property. The question worth asking is, how could the valuer,

property analyst or informed seller take into consideration the numerous factors

influencing the market value of a property during the appraisal process? The answer

to the question could lie in the ability to understand the critical factors and their

relative influences so that comparable sales record could be more accurately adjusted

in arriving at the asking price. Certainly, mere identification of factors is good, but not

so helpful to the valuer. At worst it could lead to information overload, which Diaz

(2002) identifies as the reason why valuers recoil to heuristics as the feasible methodof determining the asking price of property. This study aims to contribute to the

solution by investigating further the main factors affecting market values of listed

property and their relative influences.

METHODOLOGY

The descriptive survey method was used, which consisted of qualitative data gathering

using unstructured interviews and quantitative data gathering using structured

questionnaires. The investigations were limited to the views expressed by members of

the South African Property Owners Association in Johannesburg who deal in property

as developers, investors, consultants and managers.

Data analyses

The multi-attribute method was used to analyse the ratings of the respondents with a

view to establishing a representative or mean rating point assigned to each attribute in

a subset. The analysis draws from the Multi-attribute Utility approach of Chang and

Ive (2002), and involves the computation of the Mean Rating point (MR). The MR

indicates the level of significance or effectiveness of each attribute within a subset. In

each computation, the total number of respondents (TR) rating each attribute was used

to calculate the percentages of the number of respondents associating a particularrating point to the attribute as shown in Equation 1.

MRj = =

5

1

)%(k

p jkjki RR (1)

(Where: MRj= Mean rating point for sub-factor j; Rpjk = Rating point k(ranging from

1 5); Rjk% = Percentage response to rating point k, for sub-factor j).

The Relative Influence Index (RII) was used to compare the MR values of the factors

in a given subset. It is computed as a unit of the sum of MRs in a given subset of

factors as shown in Equation 2.


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RIIj =

=

n

j

jj MRMR1

/ (2)

(Where: RIIj= Relative Influence Index for sub-factor j).

RESULTS

Survey results

Out of the 250 self administered questionnaires faxed to the registered members of

the South African Property Owners Association (SAPOA), 53 were returned by the

cut-off date set for data collection. Only 45 questionnaires were usable, representing

an unimpressive response rate of 18 percent. The implication of the poor response rate

is that the findings of the study cannot be generalised as being representative of the

views of the SAPOA members. However, the random sampling method (Zikmund,

1997) adopted in the survey could give some measure of reliability to the findings,

which could be useful as building blocks for future studies in this area. In addition, the

demographic profiles of the respondents showed they are largely educated and

experienced decision makers in their respective organisations. Their input could be of

high value. This is evident from the 95 percent being directors or senior executives, 63

percent having first or higher degrees, and 98 percent having over 25 years of

practical experience in the real estate business.

Factors affecting the market value of property

Pilot interviews were conducted at the first phase of this study amongst 15 directorsand senior executives of companies that were enlisted in the SAPOA membership

directory in Johannesburg. Recurring themes mentioned or alluded to by more than 3

interviewees as the key factors affecting the market value of residential property were

articulated and subjected to content analyses. Results reveal seven major categories of

factors as shown in Figure 1. These provided the conceptual framework for the

research design.

Factors influencing

market value of

residential property

Market conditions

Micro & macro

economic

Legal/statutory/political

Demographic/ socio-cultural

Urban regeneration

Location

Building features

Figure 1:Broad categories of factors influencing the market value of residential

property


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Mbachu and Lenono

Constructs underlying the major categories were incorporated into the questionnaire

used in the quantitative data gathering. Using a five point rating scale, respondents

rated the relative levels of influence of the sub-factors on the market value of a listed

residential property. The responses were subjected to multi-attribute analysis as

described in the Methodology section. Tables 1-8 in the appendix show the results of

the analyses for each major category of factors. For brevity, only the significantly

influential sub-factors are highlighted. Figure 2 summarizes the relative influences of

the major factor categories on the market values of residential properties.

Location factors influencing residential property values

Table 1 shows that crime levels and security provisions, and accessibility/ proximity

of the property to centres of interests were perceived as the first and second most

influential sub-factors influencing the market value of a residential property under

location group of factors. This finding is partly in agreement with the observations of

Turner (1990) that the three most significant influences on property value arelocation, location and location. Most recurring additional factors supplied by

respondents in the open ended section of the questionnaire under this group are the

influences of development or installations nearby. Examples cited include sporting

facilities and overhead power transmission lines. Next in importance under location

are the influences of potential harm such as earthquakes, flooding, ground subsidence,

land slippage, underground water table, etc.

Macro and micro economic factors influencing property values

Under this group of factors, exchange rates, interest rates fluctuations and inflation

were believed to constitute the factors having the most profound influence on the

market value of residential property. Apparently when the exchange rate declines, thevalues of all products and services also decline, residential property inclusive. The

impact of exchange rate on residential property value was corroborated by Britton et

al. (1989) who also noted that high interest rate does not only impact on the cost of

mortgage financing, but also on the proportion of the purchase price which could be

financed, thereby limiting affordability and demand, and consequently lowering the

market values of listed properties.

Legislative/ statutory control factors influencing property values

The most influential sub-factors under this category are the various taxes relating to

the sale, ownership and use of property, notably, Property Gains Tax Laws,

municipality taxes and divergent tax rates (i.e. tax rates on service rates, electricity,water, telecommunications, etc). Planning controls were perceived to be the second

most influential sub-factors influencing property values. Britton et al. (1989) provide

further insights on these influences as including restrictions on the changes in the use

of the building and the intensity of use of the land. Such restrictions were perceived by

the respondents as limiting the utility and value of the building, as is and where is.

Demographic/ socio-cultural factors

The most significant set of factors influencing property values under this group is the

population density and projected growth; followed by demographic mix. This agrees

with Miekles (2001) observation that the demand for housing is driven by changes in

the number of households seeking housing through natural increases in population,

increased household formations and regional population shifts, among others.


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Influence of residential property features on its market value

Functionality and spatial adequacy in terms of size and number of rooms were

perceived as the most significant factors influencing the market value of residential

property. Next to these is the aesthetic appeal design, finishes, etc. It was surprising

to note that these aspects were accorded high priority over running and maintenancecosts and the age of building/ obsolescence. This could be as a result of the reported

poor maintenance culture of most developing countries (ADB, 2005).

Urban regeneration influences on residential property values

Respondents believed that adequate provision and maintenance of basic infrastructure

within an area constitutes the most significant factor influencing property values in an

area. Such infrastructure includes roads, drainage, and sewerage and refuse disposal.

Next in influence is the provision of sites and services on adjoining undeveloped

areas. Perhaps the potential influence of new developments in the latter could be the

reason for a perceived increase in the value of residential property in the existing area.

Influence of market conditions on property values

Under this group, perceived property market conditions, vacancy rates and general

business confidence level were perceived to have the most significant impact on

property values. The second most influential set of factors is constituted by demand

and supply levels for the particular property class and the perceived general market

conditions. This should be expected as market conditions and demand sub-factors are

intricately interwoven.

Miscellaneous factors

At the open ended sections of the questionnaire used for quantitative data gathering,

respondents freely supplied additional factors influencing the market value of

residential property. The most recurring additional factor which could not fit into any

of the above major groups is the influence of the valuer or real estate agent involved in

the valuation and marketing of the property. The respondents were of the view that

local knowledge, expertise and nationwide property database at the disposal of the

valuer or estate agent could significantly influence the valuation advice or the

marketing services which invariably could affect the market value of the property in

question. The second most recurring additional factor supplied is the degree of

exposure of the property to potential hazards in relation to the ground upon which it is

built, or the surrounding area. Such hazards as listed include erosion, subsoilinstability and other natural havoc. They are of the view that site inspection,

engineering geological report or Hazard Report should provide information about the

extent of exposure of the property to a list of probable hazards. The third most

recurring additional factor worth noting is the influence of improvements in the

transport facilities which could encourage workers to operate from dispersed and

distant locations thereby reducing demand in central cities.

Relative influences of the factor groups

In addition to rating the relative influences of the sub-factors under each group,

respondents were also asked to rate the relative influences of the major factor groups.Figure 2 shows that location, as should be expected, was perceived to be the most


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Mbachu and Lenono

significant set of factors influencing residential property value. Through the

computation of the relative importance indices (Equation 2), the relative contribution

each major group in quantitative terms were estimated. Location accounts for 16.3

percent of the market value of a listed residential property. Next in importance are

market conditions (14.8 percent), while demographic/ socio cultural influences were

perceived to have the least influence (12.6 percent). The additional groups of factorsthat emerged from the responses in the open-ended sections of the questionnaire were

treated as qualitative data or constructs that could inform directions in further studies

in this area. Such factors could be grouped under miscellaneous or extraneous

variables.

Figure 2:Relative influences of factor groupings on residential property values

Building features (4)

14%

Urban regeneration (5)

14%

Micro and macro

economic (3)

15%

Market conditions (2)

15%

Location (1)

16%

Demographic/ socio-

cultural issues (7)

13%

Legal/ s tatutory controls

(6)

13%

CONCLUSIONS

This study has investigated the nature and magnitude of influences of the factors

affecting the market values of residential properties listed in the property market.

From the results of the investigations and analyses carried out, it was found that seven

groups of factors affect the residential property value. In order of relative influence,these are location (16.3 percent), market conditions (14.8 percent), micro and macro

economic factors (14.6 percent), building features (14.4 percent), urban regeneration

(13.9 percent), legal/ statutory controls (13.4 percent) and demographic/ socio-cultural

issues (12.6 percent).

In the sales comparison method commonly adopted for the estimation of the market

value of residential property, the relative weights of the major groups and sub-groups

of factors could provide a more rationale basis for the adjustment of the comparable

sales value of the property to arrive at the asking price that could be as close as

possible to the price buyers are willing to pay. This could guard against overpricing of

property, and stimulate demand for a more vibrant property market. The construction


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industry and the national economy could benefit from the improved demand and sales

spin offs in the property market.

REFERENCES

Asian Development Bank (ADB) (2005) Developing member countries perspectives.Report on Road, Funds and Maintenance. ADB, Manila, Philippines. Retrieved

14 March 2005 from:

http://www.adb.org/Documents/Reports/Road_Funds_Maintenance/chap04.pdf

Britton, W., Davies, K. and Johnson, T. (1989)Modern methods of valuation, 8th

edition. Estate Gazette Ltd, London.

Chang, C. and Ive, G. (2002) Rethinking the multi-attribute utility approach based

procurement route selection technique. Construction Management & Economics,

20 (3), 275-284

Diaz, J. (2002) Valuers must be more aware of their own influence.RICS-

Foundation News, (16 September). Retrieved on 9 March 2005 from:

http://www.rics-foundation.org/news/pressrelease.aspx?pid=59Mbachu, J.I.C (2003) A critical study of client needs and satisfaction in the South

African building industry. PhD thesis. Faculty of Economic and Building

Sciences, University of Port Elizabeth, South Africa.

Meikle, J. (2001) A review of recent trends in house construction and land prices in

Great Britain. Construction Management and Economics, 19, pp. 259-265

Mockrealty (2005) Factors affecting your offer price. Mock Realty Inc., Boulder,

Colaroda, USA. Retrieved 11 March 2005 from:

www.mockrealty.com/buying/price.php

Parnham, P. and Rispin, C. (2000)Residential property appraisal. Taylor and Francis

Group, London.

Real Estate Institute of New Zealand (REINZ) (1986)Real estate appraisal, 3rd

Edition (September). The Real Estate Institute of New Zealand, Wellington.

Royal lePage (2003)Determining the value of your home. Royal lePage Real Estate

Services Ltd, Ontario, Canada. Retrieved on 14 September 2004 from:http://www.royallepage.ca/selling/sell-overpricing.htm)

Turner, A. (1990)Building Procurement. Macmillan Education Ltd, London.

Turner, R. (2004) The appraisal process and your taxes. The Property Appraisers

Office, Hillborough County, Tampa, Florida. Retrieved on 14 September 2004

from: http://www.hcpafl.org/function.html)

Zikmund, W.G (1997)Business Research Methods, 5thEdition, Harcourt Brace

College Publishers, Orlando, Florida, USA.


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Mbachu and Lenono

APPENDIX

Table 1: Location factors influencing residential property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Of littleinfluence; 'NI' = Not influential

*Levels of influence

VI I SI LI NI

5 4 3 2 1

Location factors % % % % % TR MR

1 Crime levels, security network/ patrols 62.2 31.1 4.4 2.2 0.0 45 4.533

2 Accessibility and proximity to centres of interestse.g. shops, public services, transport nodes etc

44.4 42.2 8.9 4.4 0.0 45 4.267

3 Availability of social infrastructure and supportservices e.g. banks, offices, schools, hospital etc

33.3 40.5 19.0 4.8 2.4 42 3.976

4 Sanitary conditions, waste disposal system,general cleanliness of the area

42.9 23.8 21.4 7.1 4.8 42 3.929

5 Traffic congestion, parking spaces/permits 25.0 50.0 18.2 4.5 2.3 44 3.909

6 Property class and level of competition in thearea

17.8 62.2 13.3 4.4 2.2 45 3.889

7 Nature of the neighbourhood: Quality of

surrounding buildings, planning laws, socio-cultural issues, etc

14.3 52.4 21.4 9.5 2.4 42 3.667

8 Environmental Conditions e.g. Atmosphericpollution, noise levels, etc

18.6 25.6 44.2 7.0 4.7 43 3.465

9 Topography: Soil conditions, landscape, views

etc.

9.3 27.9 39.5 18.6 4.7 43 3.186

Table 2: Macro and micro economic factors influencing residential property value

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Of littleinfluence; 'NI' = Not influential


VI I SI LI NI

5 4 3 2 1

Macro and micro economic factors % % % % % TR MR

1 Exchange rates, fluctuations in interest rates

and Inflation

55.6 26.7 11.1 4.4 2.2 45 4.289

2 Average wages, affordability levels, availabilityof finance and repayment conditions

30.2 34.9 7.0 23.3 4.7 43 3.628

3 General capital growth in real estate business 14.3 31.0 35.7 9.5 9.5 42 3.310

4 Global economic trends affecting propertybusiness levels

14.0 27.9 27.9 20.9 9.3 43 3.163

5 Offshore investment opportunities andattractiveness

11.1 24.4 37.8 15.6 11.1 45 3.089

6 Energy crisis and its influence on main streameconomy

4.8 14.3 47.6 19.0 14.3 42 2.762


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Table 3: Legislative/ statutory control factors influencing property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Oflittle influence; 'NI' = Not influential


VI I SI LI NI5 4 3 2 1

Legislative / statutory control factors % % % % % TR MR

1 Property Gains Tax Laws, municipality taxes,divergent tax rates ( tax rates on service rates,electricity, water, telecommunications etc)

51.1 28.9 13.3 4.4 2.2 45 4.222

2 Planning controls: Town planning / zoning andcountry planning act

48.8 20.9 20.9 7.0 2.3 43 4.070

3 Legal requirements by the council, based onheight restrictions, quality and class ofresidential property, etc

31.8 31.8 27.3 6.8 2.3 44 3.841

4 Deregulation / Liberalization of property

market, e.g. allowing foreign investorsinvolvement in property business

15.6 26.7 40.0 11.1 6.7 45 3.333

5 By - laws pertaining to safety, healthy working

conditions, fire equipment, etc

19.5 22.0 36.6 12.2 9.8 41 3.293

6 Tenure of the property ( Price of property is

valuated in terms of the time of lease).

7.1 45.2 26.2 7.1 14.3 42 3.238

7 Price paid on property on compulsory purchase(local authorities, statutory undertakings).

2.4 31.0 35.7 11.9 19.0 42 2.857

8 Periodic valuation of residential property for

taxation purposes.

11.6 23.3 23.3 11.6 30.2 43 2.744

Table 4: Demographic/ socio-cultural factors influencing residential property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Oflittle influence; 'NI' = Not influential.


VI I SI LI NI

5 4 3 2 1

Demographic/ socio-cultural factors % % % % % TR MR

1 Population density and projected growth 48.9 28.9 17.8 4.4 0.0 45 4.2222 Demographic mix and resultant influence on

property demand25.0 34.1 36.4 4.5 0.0 44 3.795

3 Socio cultural dynamics and influence on

property class

25.6 34.9 30.2 4.7 4.7 43 3.721

4 Nature of the residents: employment and socialstatus, etc

27.9 37.2 20.9 2.3 11.6 43 3.674

5 Presence of destitute in the neighbourhood andthe perceived menace

13.6 29.5 50.0 4.5 2.3 44 3.477

6 Multi ethnic co-habitation and perceived socialtension

20.9 37.2 18.6 11.6 11.6 43 3.442


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Mbachu and Lenono

Table 5: Residential property features influencing its market value*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Of

little influence; 'NI' = Not influential


VI I SI LI NI

5 4 3 2 1Influential building features % % % % % TR MR

1 Functionality and spatial adequacy: size andnumber of rooms, number of floors, etc

40.0 53.3 4.4 2.2 0.0 45 4.311

2 Aesthetics appeal : architectural design, style,fashion, concept, finishing

51.1 35.6 6.7 4.4 2.2 45 4.289

3 Security facilities: provision of fencing, burglar

alarms, etc

41.9 37.2 16.3 4.7 0.0 43 4.163

4 Nature and quality of services: Adequacy ofmechanical, electrical and plumbinginstallations.

26.7 53.3 15.6 4.4 0.0 45 4.022

5 Repairs and level of required refurbishment 26.7 51.1 17.8 4.4 0.0 45 4.000

6 Quality and durability of materials,components and construction.

22.7 50.0 25.0 2.3 0.0 44 3.932

7 Running and maintenance costs 27.9 34.9 27.9 9.3 0.0 43 3.814

8 Age of the building/ obsolescence 30.2 39.5 16.3 9.3 4.7 43 3.814

9 Adequacy of premises, parking space,landscape, etc

17.1 37.1 42.9 2.9 0.0 35 3.686

Table 6: Urban regeneration influences on residential property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Oflittle influence; 'NI' = Not influential


VI I SI LI NI

5 4 3 2 1 TR MR

Urban regeneration influences % % % % %

1 Infrastructure provision and maintenance:roads, drainage, sewerage & refuse disposal, etc

26.2 61.9 7.1 4.8 0.0 42 4.095

2 Sites and services on adjoining undeveloped

areas

24.4 39.0 29.3 2.4 4.9 41 3.756

3 Perceived impact of urban rejuvenation

programmes on property Values

26.2 42.9 14.3 11.9 4.8 42 3.738

4 Level of development and maintenance of

property in the regenerated areas.

20.0 40.0 35.0 0.0 5.0 40 3.700

5 Style of the inner city culture 4.8 23.8 54.8 7.1 9.5 42 3.071


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Table 7: Market conditions influencing residential property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' =Of little influence; 'NI' = Not influential


VI I SI LI NI5 4 3 2 1

Market conditions % % % % % TR MR

1 Property market conditions, vacancy rates,

general business confidence level

40.0 51.1 6.7 2.2 0.0 45 4.28

9

2 Demand and supply of the class of residentialproperty

40.9 43.2 15.9 0.0 0.0 44 4.250

3 Fitness for purpose 22.7 45.5 27.3 4.5 0.0 44 3.86

44 Rate of capital growth for the property type &

node

20.9 39.5 34.9 0.0 4.7 43 3.72

15 Publicity/ marketing strategies; level of

experience of estate agent24.4 39.0 24.4 0.0 12.2 41 3.63

4

6 Conditions and price charges of residentialproperty on the market

19.5 39.0 22.0 14.6 4.9 41 3.537

7 Commission fee included in the sale ofproperty

9.5 14.3 28.6 19.0 28.6 42 2.571

Table 8: Relative influences of factor groups on residential property values

*Levels of influence: 'VI' = Very influential; 'I' = Influential; 'SI' = Somewhat influential; 'LI' = Of

little influence; 'NI' = Not influential*Levels of influence

VI I SI LI NI

5 4 3 2 1

Factor group % % % % % TR MR RII %

1 Location 73.3 26.7 0 0.0 0.0 45 4.73 0.163 16.3

2 Market conditions 46.7 37.8 15.6 0.0 0.0 45 4.31 0.148 14.8

3 Micro and macro economic 48.9 35.6 11.1 0.0 4.4 45 4.24 0.146 14.6

4 Building features 44.4 31.1 22.2 2.2 0.0 45 4.18 0.144 14.4

5 Urban regeneration 44.4 31.1 13.3 6.7 4.4 45 4.04 0.139 13.9

6 Legal / statutory controls 39.0 29.3 14.6 17.1 0.0 41 3.90 0.134 13.4

7 Demographic / socio -cultural

20.0 35.0 35 10.0 0.0 40 3.65 0.126 12.6

29.06 1.00 100

Market Conditon

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