The Effect of Beam Plus Certification on Property Price in Hong Kong

Abstract

In response to the public’s increasing awareness of sustainable development, the construction industry has introduced “green” buildings which emphasize better environmental performance. However, as a building’s environmental performance is difficult to discern for laymen, different green building certifications have been established for evaluations in this regard. This study evaluates whether there exists a price premium for living space in buildings certified with BEAM Plus. The findings show that the prices of flats in BEAM Plus-certified buildings are 4.4% higher than those in nonregistered buildings, and that housing units in buildings with an “unclassified” rating are transacted at a discount of 5.9%. Nevertheless, if homebuyers mistake an “unclassified” building for a non-registered building, due to the non-disclosure of the “unclassified” result by developers, the price premium of BEAM Plus certification becomes higher (6.2%). Regardless, the price premium is much lower than those on the office sector. The reasons behind such differences can be attributed to the disparities in the tangible and intangible benefits associated with green living space and green office space. Policy implications with reference to Hong Kong’s GFA concession policy are then discussed.

Sustainable Construction Industry in Cambodia: Awareness, Drivers and Barriers

“…In Hong Kong, Building Environmental Assessment Method (BEAM) Plus is one of the green-building certifications. Compatible with internationally-renowned green-building certifications such as LEED and BREEAM, the original intent of BEAM Plus was to be a voluntary scheme for the assessment of buildings' environmental performance [35]. The International Initiative for a Sustainable Built Environment (iiSBE) developed the SBTool assessment method to rate the sustainability performance of buildings, which focuses on the environmental, economic as well as social aspects of sustainability [36].…”

Environmental Certification Schemes and Property Values: Evidence From the Hong Kong Prime Commercial Office Market

“…To examine the financial implications of BEAM, BEAM Plus and LEED certifications on the value of rental office space in Hong Kong, the study deployed a hedonic price model through a fixed effects approach. Despite some weaknesses (assumptions), the hedonic model (HPM) is regarded as an effective tool in the area of property valuation analysis (Hui et al, 2015;Hui, Tse, & Yu, 2017). For example, using HPM, the effects of structural attributes such as floor area, age and size of the unit, etc.…”

Do Consumers Care about the Energy Efficiency of Buildings? Understanding Residential Choice Based on Energy Performance Certificates

“…As another positive impact on the appearance of the resultant of EPC is a price premium. By investigating the impact of EPC on house price, some studies have found that the price premium is positively related to a higher EPC level [16,17]. Fuerst et al (2016) [16] conclude that in the UK there are positive price premiums for houses in higher efficiency rates (A/B and C), and there are discounts for lower efficiency rates (E and F).…”

“…Fuerst et al (2016) [16] conclude that in the UK there are positive price premiums for houses in higher efficiency rates (A/B and C), and there are discounts for lower efficiency rates (E and F). Hui et al (2017) [17] shows that prices of energy certified buildings are 4.4 percent higher than those of non-registered buildings in Hong Kong.…”