Estimating the value enhancement effects of refurbishment
Author(s)
Author(s)
Chau, K. W.
Yiu, C. Y.
Wong, S. K.
Date Issued
2003
Publisher
Emerald Publishing
Journal
Facilities
Volume
21
Issue
1/2
Start page
13
End page
19
Abstract
There have been very few empirical studies investigating the value enhancement effects of refurbishment and most rely on cross-sectional data, which cannot show the before and after effects conclusively because of the heterogeneous nature of the properties. The problem of refurbishment is more complicated in buildings or housing estates with multiple-ownerships, since refurbishment is a collective decision, which can sometimes be difficult to achieve. This paper uses panel data in Hong Kong to estimate the impact of refurbishment on the market value of properties in a large housing estate. The results show that the refurbishment brought about approximately a 9% increase in the market value of the properties, which far exceeds the cost of refurbishment. It suggests that property owners of a housing estate will benefit if they can reach a collective decision on renovation.
SFU Affiliated Publication
No
Availability at SFU Library
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