The influence of architecture on real estate market value: A methodological framework

Abstract

The built environment takes a core position between architectural professionals, economists, geographers, and other fields. The object of this research is the mechanism of value transfers between architectural objects and their market value. Architecture is the art and science of designing space from the macro level of urban planning, urban design, and landscape architecture to the micro level of construction details and, sometimes, furniture. Architectural variables in econometric models are used to identify spatial dependency, spillovers of value, externalities, links between 'good' architecture and market value, heritage aspects, contributions to sustainable development, and architecture as public good. While many studies have focused on the determinants of the real estate market value, the aim of this research is to capture the areas of influence of architectural variables on the market value of a property. To structure that influence, we analyzed the types of value a built environment

Planning and Architecture as Determining Influences on the Housing Market: Budapest–Csepel’s Post–War Housing Estates

“…According to Navickas et al (2020), planning and architecture play an important role in shaping the built environment, and the built environment has a great influence on the real estate positions of HEs. In general, due to the technological disadvantages of prefab buildings, the older brick-built HEs and mid-rise buildings occupy a better market position.…”

“…The mini-HEs, the prefabricated buildings, do not have the same value because of their sheer size and their architectural character. Navickas et al (2020) identify five areas where architecture has an impact on the real estate market. It is essential to highlight the spatial dependence, spillover effects, and externalities of architecture.…”

“…In Hungary, central planning, architecture, and construction have played a key role in shaping the built and social environment of HEs. Architecture, in a narrow sense, refers to the spatial, formal, technical, technological, and engineering solutions used in construction, but, in a broader sense, it also encompasses the culture, artistic solutions, and process of shaping the space (Navickas et al, 2020). In recent decades, the importance of careful design, liveability, accessibility, and environmental friendliness of the living environment has gradually increased in the construction and development of HEs.…”

Architectural Factors Influencing a Housing Market Value: A Theoretical Framework

“…While architectural factors from scientific literature on the determinants of real estate market value have a more direct influence on property market value, the other part of architectural variables found in literature on the value built environment generates have positive public outcomes that therefore result in higher market value. A direct influence as well as indirect influence on market value exists (Navickas et al, 2020). The complex mechanism of value transfers between architecture, the built environment, public policy dimensions and real estate market value exists.…”