Quality of urban area, distance from city centre, and housing value. Case study on real estate values in Turin

摘要

A tremendous number of studies have investigated the relation between real estate value and characteristics of the area. This paper briefly shows more than one hundred empirical results from the literature, quantifying how much positional factors such as green, social context, pedestrian areas, pollution, aesthetics, views and accessibility influence the property value. We call Positional Value that part of the real estate value given from the characteristics of the area. As an empirical example, an analysis of the city of Turin shows how, changing the area of the city, the value of a house increases/decreases as much as 142% of its own value, ceteris paribus, even among areas quite close to each other. More specifically, the output of this study indicates that the real estate value decreases by 0.23% for each 1% increase of the distance from the city centre, but increases by 0.58% for each 1% increase of the quality of the site. The monetary costs of housing, time and transport, and the qualitative benefits received from the sites characteristics, play a main role within the households' decision processes when choosing among alternative dwellings. On the other way round, the quality of the area is capitalised by the real estate value which may then be seen an indicator of the former.