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A demonstration of sustainability arguments using house price data Tom Kauko, Department of Geography, NTNU, Trondheim, Norway ERES Conference, 3-6 July,

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Presentation on theme: "A demonstration of sustainability arguments using house price data Tom Kauko, Department of Geography, NTNU, Trondheim, Norway ERES Conference, 3-6 July,"— Presentation transcript:

1 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.

2 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 (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.

3 Environmental -ecologic sustainability Social-cultural sustainability Economic -financial sustainability The current theory of sustainability

4 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/region 11. Communicativeness in local/regional planning 12. Innovativeness of the region

5 Urban property development – how sustainable? The right mix of investment and regulation fosters 1. Quality 2. Affordability 3. Diversity (evolutionary argument) OBS: Budapest is more affected by the global crisis than other European cities! EnvironmentEconomySocial QualityXX AffordabilityXX DifferentiationXXX

6 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!

7 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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9 Example of layer: single-family price/sqm High price areas – how sustainable are they? To find out we need field inspection

10 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

11 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

12 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


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