ERES Conference, 3-6 July, 2013, Vienna, Austria.
A demonstration of sustainability
arguments using house price data
Tom Kauko, Department of Geography,
NTNU, Trondheim, Norway
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 2000-09 (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.
The current theory of sustainability
Environmental
-ecologic
sustainability
Economic
-financial
sustainability
Social-cultural sustainability
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
Urban property development – how sustainable?
The right mix of investment and regulation fosters
1. Quality
2. Affordability
3. Diversity (evolutionary argument)
Environment Economy
Quality
X
Affordability
X
Differentiation X
X
Social
X
X
X
OBS: Budapest is more affected by
the global crisis than other
European cities!
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!
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”
(0,0)
SOM
2.
1.
(2,1)
3x2 map
(0,0)
(1,0)
(0,1)
N-dimensional response
vectors
(2,0)
(1,1)
(0,1)
Ndimensional
observation
vector
’Winner’
(1,0)
(0,2)
(2,0)
(1,1)
(1,2)
(3,0)
(2,1)
(2,2)
4x3 map
(3,1)
(3,2)
2000
2001
Example of layer:
single-family price/sqm
2002
2003
High price
areas – how
sustainable
are they?
2004
2005
2006
2007
2008
To find out we
need field
inspection
2009
LEISURE AMENITIES
BUILDING SAFETY AND SECURITY
(exclusively for residents and their guests)
24-hour reception desk service
Fitness Center
Closed-circuit video surveillance system in
Sauna, solarium
common areas
Thermal water pool
Controlled access via sophisticated entry
Private swimming pool
system with
Hydro-, medical-, recreational massage
coded cards and limited zones
Aqua - fitness, step - aerobic
Centralized monitoring of individual apartment
Squash courts
Medical control (sport medic)
security
Billiard and game room
systems
Library
Special security doors to all apartments
Sun Patio with secure playground
Computerized fire alarm system
Rooftop Garden
Monitored residential parking with sprinkler
EXCEPTIONAL AMENITIES
system, CO
Multifunctional rooms for events
detector
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
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
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