Modelling coastal externalities effects on residential housing values

Abstract

Purpose This paper aims to examine the impact of coastline on the rental value of residential property in proximity to the coastline, using the hedonic pricing model from two perspectives. First, Model 1A–C accounted for estimating the influence of coastal amenities while controlling for other housing attributes influencing rent. Second, Model 2A–C accounted for the interaction between coastal amenities/disamenities and other housing attributes influencing rent. Design/methodology/approach A survey approach was adopted for the data collection process. For both models, property values were measured in proximity to coastline using 0–250 m, 251–500 m and 0–500 m. Findings Findings revealed that property rental value increases as we move away from the coastline when disamenities are not controlled. The results suggested that for a mean-priced home (N2,941,029 or $8,170) at the mean distance from the coastline (301.83 m), a 1% increase in distance from the coastline would result in a 0.001% or N9.77 ($0.03) increase in rental value. Practical implications The implication to real estate valuers is that varying premiums should be considered when valuing a property depending on the distance to the coastline while considering other housing attributes. Originality/value This research introduces a novel approach to the hedonic model for determining property values in proximity to coastal environment by estimating the influence of coastal amenities while controlling for other housing attributes influencing rent, on the one hand, and accounting for the interaction between coastal amenities/disamenities and other housing attributes influencing rent, on the other.

Factors Influencing Stakeholders’ Decision to Invest in Residential Properties: A Perceptual Analysis of Flood-Risk Areas

“…The input of stakeholders in the built environment, and the real estate sector in particular, is very important in decision-making, policymaking, setting industry practices, and the development of relevant standards [90,100]. Perception analysis is very important, as considered in various studies on investment decisions for residential areas [26,29,39]. Thus, we also applied perception analysis in the present study and presented the considerations for decision-making.…”

“…Ayoola et al [29] also modelled the externalities necessary for assessing residential property values. The value assigned to a property is contingent upon the existence of several distinct bundles of characteristics [30,31].…”

Geographical Influences on Job–Housing Balance: A Study of Coastal Urban Areas in Boston

“…Additionally, inland regions may have cultivated diverse economic environments not solely reliant on the marine economy, attracting a wide array of industries through incentives, infrastructural investments, and labor force development initiatives. There is also the matter of residential preferences; coastal zones, while attractive for living, are associated with a higher cost of living [49]. Businesses may thus gravitate towards locations more accessible to a workforce seeking affordable housing options, which are more readily found as one moves away from the coast.…”

Determining Residential Location Choice along the Coastline in Victoria Island, Nigeria Using a Factor Analytical Approach

“…None of the approaches deployed have shown significant motives influencing the household's decisions on their residential location choice [34]. Moreover, with the complexity revolving around residential situations, various methods such as sensitivity studies, decision-making analysis, risk analysis, SWOT (strength, weakness, opportunities, threat) analysis, perception analysis, and choice analysis, among others [35,36], have been adopted for investigating studies around coastal environments.…”