Is 'Green' Capitalized to Residential Property Price? Taiwan's Evidence

I-Wei Peng and Jen-Hsu Liang

ERES from European Real Estate Society (ERES)

Abstract: Purpose - Global environment has worsened since the 20th century, hence the development and research of green building has become a global concern. The literatures have found that green building will increase its property value. Green building has been developed over a period of time in Taiwan. However, the relationship between green building and property price is not significant. This study aims to test the actual 'green' premium on property price and explore the reasons why it was slowly promoted in Taiwan.Design/methodology/approach - This study is based on the Hedonic price model to estimate the price premium of green building in Taiwan by adopting a least squares regression model. Firstly, we get the variables of green building characteristics by literatures reviewing, questionnaire and interview. We then analyze the effects of 'green building'.Findings - We found that the number of green building, EEWH (Ecology, Energy Saving, Waste Reduction, Health) in Taiwan, increased slowly. Consumers recognize green is helpful to health and the earth. However, it is less price premium. The developers have less incentive to build EEWH building beside renewal project and luxury house. The 'Floor Area Ratio Incentive Policy' should be expanded to general housing. Originality/value - The achievements help to analyze the effect of green building on property value much more, and improves the green knowledge to community. It will also make the developers realize which indicator of 'green' affects property value more. As for the government, it can support the improvement on green policy, and promote more prosperous green building in Taiwan.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2013-01-01
New Economics Papers: this item is included in nep-ure
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