Will Good Service Quality Promote Real Estate Value? Evidence from Beijing, China

Fangyuan Liu, Kaili Chen, Tianzheng Zhang, Yingjie Zhang and Yan Song
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Fangyuan Liu: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Kaili Chen: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Tianzheng Zhang: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Yingjie Zhang: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Yan Song: The Department of City and Regional Planning, University of North Carolina, Chapel Hill, NC 27599, USA

Land, 2022, vol. 11, issue 2, 1-18

Abstract: In the field of land use and urban management, real estate value-added issues have attracted much attention. Previous studies mainly focused on the premium of basic public services (such as infrastructure) in real estate value. As an important part of urban management, the contribution of property service is often underestimated. Few empirical studies mentioned the potential contribution of property service quality. Based on this, this paper aims to confirm and quantitatively evaluate the premium of good service quality in real estate value utilizing 155,845 samples of housing resale transactions in Beijing from 2012 to 2019. Furthermore, we also explore the dynamics and heterogeneity of the above premium. Our results show the following: Firstly, good service quality does show premium in real estate value, and the higher the service quality, the greater the premium in housing price. Secondly, this premium keeps increasing during our study period. With urbanization and rising incomes of residents, property service is increasingly important. Thirdly, the contribution of service quality to real estate value is greater when serviced houses have a higher price or larger area, are relatively newer, or further away from the city center. The findings of this current research not only deepen our understanding of service quality’s premium in real estate value, but also provide implications for urban management.

Keywords: land value-added; urban management; hedonic price model; housing price; property service; property management fee (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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