An empirical study on the positive externality of building refurbishment

Purpose – The paper's objective is to empirically study the effects of building refurbishment on the prices of the dwelling units in a contiguous housing estate in Hong Kong.Design/methodology/approach – In a congested living environment like Hong Kong, it is difficult, if not impossible, to have a view unobstructed by buildings. As such, the quality of views is dependent on the aesthetic quality of surrounding buildings. It is likely that poorly maintained buildings will impose negative visual effects on their immediate surroundings. Refurbishing these poor buildings should, therefore, reduce or even counter this negative externality. To study the positive externality brought about by building refurbishment, a hedonic price analysis was conducted on a set of panel data consisting of property transactions in a large housing estate located in Pokfulam. This estate was chosen because its adjoining buildings underwent refurbishment in 1998.Findings – The results showed that the refurbishment increased signif...

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