Changes in the Hedonic Valuation of Amenities and Characteristics in Post-pandemic Residential Property Markets

Shiwen Xu

No 11996, CESifo Working Paper Series from CESifo

Abstract: This study examines whether the COVID-19 pandemic led to lasting shifts in residential housing valuation in the UK, focusing on Greater London and seven major cities. The following questions are addressed: a) Was this change in residential valuations temporary, or is it likely to be permanent? b) For what other characteristics do we see a fundamental shift in valuation by home buyers? c) Did seven other cities follow a consistent change with Greater London? Using transactions data for more than 1.5 million house sales from 2017 to 2023, and detailed neighborhood information, we find a persistent flattening of the CBD-distance price gradient: by 7.7% (from -0.683 to -0.63) in Greater London and 9.6% (from -0.135 to -0.122) in major UK cities. An event study confirms the change is stable over time. Hedonic price models show that this effect holds after controlling for amenities, with post-pandemic buyers placing greater emphasis on school quality and property type. Notably, demand shifts toward large homes, with premiums rising for terraced, detached, and semi-detached houses, and falling for apartments (flats). Effects of crime and density vary by region, showing stronger negative valuation in London and weaker or even positive effects elsewhere.

Keywords: hedonic price model; neighbourhood amenities; housing price premium; housing market (search for similar items in EconPapers)
JEL-codes: C23 R21 R31 (search for similar items in EconPapers)
Date: 2025
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