The impact of high-rise condos on residential prices: An analysis for Nunoa (Santiago de Chile)
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Transcript of The impact of high-rise condos on residential prices: An analysis for Nunoa (Santiago de Chile)
The impact of high-rise condos on residential prices: An analysis for Nunoa (Santiago de Chile)
XVI EUROPEAN REAL ESTATE SOCIETY CONGRESS | Milan, Italy 23th, 26th of June 2010
Carlos, Marmolejo Duarte;Esteban, Skarmeta Cornejo &Carlos, Aguirre Nunez
Centre for Land Policy and Valuations Polytechnic University of Catalonia
The impact of high-rise condos on residential prices: An analysis for Nunoa (Santiago de Chile)
XVI EUROPEAN REAL ESTATE SOCIETY CONGRESS | Milan, Italy 23th, 26th of June 2010
Carlos, Marmolejo Duarte;Esteban, Skarmeta Cornejo &Carlos, Aguirre Nunez
Centre for Land Policy and Valuations Polytechnic University of Catalonia
Research questionThe impact of high-rise condos on residential prices
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Research question
Whether or not high-rise resindential condos impact on real estate prices of neighbouring housings?
El ruido mensurado
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Case studyA borough in Santiago de Chile Metropolitan Area
Ubicación de Ñuñoa dentro del Gran Santiago Ubicación de los condominios estudiados en Ñuñoa
Fuente: Elaboración propia
16 sqKm163.000 inhabitantsMedium inconme populationNot homogeneous income levelFormerly single-family housing
2000-2003 59 “high rise” apartment builtAll of them redeveloping the land formerly occupied by single-family housesUp to 19 storiesUp to 47.000 sqMeters
El ruido mensurado
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Case study
Parking Gym
Street view Piscina Sala de estudio
Private greenareas Games roomSource: www.porta l inmobi l iario.com
"It highlights the opaque perimeter closure (up to 30% by law), as well as
the presence of low-rise houses in the neighborhood"
Typical apartment building in Nunoa
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Case studyTypical apartment building in Nunoa
Eldo
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Prostest of original settlers Again gentrification, and other externalities (e.g. shadow & congestion)
Source: Aguirre & Marchant, 2007
Hypothesis & theoryThe impact of high-rise condos on residential prices
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Hypothesis
High-rise apartment buildings, may produce negative externalities, but they do produce a positive impact on real estate prices of neighboring detached houses.
El ruido mensurado
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Theoretical frameworkSabatini, Cáceres & Cerda (2001); Cáceres & Sabatini (2004), Salcedo & Torres (2004)
1. There is an improvement in the urban landscape, produced by the emergence of new high-quality buildings and the construction of new, but small, infrastructures around those new residential buildings (e.g. street pavement). Both factors do produce an externality, in the short run, with a positive impact on neighboring real estate prices.
2. The supply of dwellings orientated to medium-high income households produce an gentrification process, which may produce a revalorization process.
3. The increase of population density, produces an emergence of new services in the neighboring areas.
4. The construction of new buildings do impact on the perception of original settlers-owners, and their willingness to ask for their properties (to be redeveloped) increases.
Research agendaThe impact of high-rise condos on residential prices
El ruido mensurado
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Research agenda
1. Does the impact depends on the size of the condominium?
2. Which is the spatial extend of the impact?
3. Is the impact stationary across all the municipal area of Nunoa?
Used methodology & data
The impact of high-rise condos on residential prices
Methodology
OLS Hedonic price model
n
a aaen
e esn
s svn
v v ABEBSBVBBPLn11110)(
Structural Social Externalities Accesibility
Geographical weighted regression Hedonic price model
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otherwisehdsihd
wiij
i
ijij
Wij=ponderation factorDij distance between each observation i and j pointHi distance of farest case j
Data (55 covariables)
1.185 sales of single-family houses (Property registry)
DemographicsSocioeconomicsEconomic activity premisesHosing quality
Land use and building potential (Master Plan)
Residential condos features (Municipal buildings permits)
Accesibility indexes (Transcad GIS)
National Census
Main resultsThe impact of high-rise condos on residential prices
El ruido mensuradoModelos MCO
R2 0,576 0,579 R2 corregida 0,574 0,576
Error típ. de la estimación 0,495 0,494
Covariable / factor
B (no estanda-
rizado)s ig.
Beta (estanda-
rizado)
B (no estanda-
rizado)s ig.
Beta (estanda-
rizado)
(Constante) 7,035 - 7,081 - Superfi cie del predio 0,002 0,00 0,945 0,002 0,00 0,941 Cuadrado de la Superfi cie 0,000 - 0,00 0,420 - 0,000 - 0,00 0,418 -
Factoria l grupos menor NR (+) vs mayor NR (-)
0,148 - 0,00 0,191 - 0,147 - 0,00 0,190 -
Densidad construida en manzana 0,632 0,00 0,126 0,481 0,00 0,096 Dummy año de venta CU 2004 0,341 0,00 0,135 0,324 0,00 0,129
Dis tancia (m) a colegios particulares-1,20E-04 0,00 0,068 - -1,20E-04 0,00 0,068 -
Pres encia de condominios vertica les en buffer 300 nd nd nd
Superfi cie de obra nueva (CV) buffer 300m nd nd nd 6,13E-06 0,01 0,059
ANOVA
ModeloSuma de
cuadradosdf
Media cuadrada
Suma de cuadrados
dfMedia
cuadrada
Regres ión392 6 65,41 394 7 56
Residuos 288 1.178 0,24 287 1.177 0
Tota l 681 1.184 681 1.184 F Sig. F Sig.
267 0 231 0,00
NR= Nivel de renta
Variable dependiente: Ln Valor de Venta de CU
MCO calibrado por el método de pasos sucesivos
MOD. 1a MOD. 1b
1. Does the impact depends on condominiums size?
•Lot size (+)
•Sq Lot size (-)
•Lower income population (-)
•Population density (+)
•Dist. to private schools (+)
•Dummy presence of
neighbouring condominiums
(n.s.)
•Built floor area of
neighbouring condos (+)
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2. Which is the spatial extend of the impact?
Statial interdependence B Sig.
new building area (HC) buffer 100m 8,4E-06 0,08 new building area (HC) buffer 200m 4,2E-06 0,19 new building area (HC) buffer 300m 2,4E-06 0,26 new building area (HC) buffer 400m -9,7E-07 0,53 new building area (HC) buffer 500m 4,1E-07 0,70
Dependent variable: Unstandardized residuals from model 1b without new building area (HC) buffer
Source: Self elaboration, independent variable forced into the OLS model (enter)
-2,00E-06
0,00E+00
2,00E-06
4,00E-06
6,00E-06
8,00E-06
1,00E-05
0,000
0,100
0,200
0,300
0,400
0,500
0,600
0,700
0,800
100m 200m 300m 400m 500m
Sig.B
Buffer
Sig.
B
Single family house
d. The weighting constant is 1,340*pi.
Unstandardized Coefficients B in GWR model
N Min. MaxHuber's M Estimator St.Desv.
Local regressions
significant at 95% level
high income groupsnew building area (HC) buffer 300m 545 -6,03E-05 7,00E-05 3,65E-06 2,06E-05 7%
med-high income groupsnew building area (HC) buffer 300m 567 -3,60E-03 1,41E-03 4,63E-06 2,03E-04 25%
med-low income groupsnew building area (HC) buffer 300m 62 -1,29E-04 3,93E-05 -4,48E-05 4,09E-05 50%
low income groupsnew building area (HC) buffer 300m 11 -1,56E-04 2,77E-05 -1,19E-04 5,78E-05 0%
Sum 1.185 18%
Note: Segmentation of the sample according to an factorial analysis and cluster performed on the percentage of persons by level of education and income
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3. Is the impact stationary across all the municipal area of
Nunoa?
Division of Nunoa in socioeconomic homogeneous areas using factor and cluster analysis
Final remarksThe impact of high-rise condos on residential prices
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Final remarks
1. Despite negative externalities, high-rise apartment buildings seems to produce a positive impact, in the short run, on real estate prices of neighboring houses
2. The impact do depends on condominium size, the bigger is the neighboring condo, the bigger is the positive impact.
3. The impact do deeply decrease with the distance.
4. The wealthiest areas in Nunoa, are the most benefited from high-rise building construction. So there is not a spatial convergence on real estate prices, but a divergence produced by a laissez faire urban policy
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Thank you
Centre for Land Policy and Valuations Polytechnic University of Catalonia