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The effects of foundation quality on residential housing value; a case study of the municipality of Rotterdam

Feldkamp, Daan (2022) The effects of foundation quality on residential housing value; a case study of the municipality of Rotterdam. Master thesis.

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Abstract

This paper employs a mixed methods analysis, co-combining hedonic pricing in the form of OLS regression and problem-centered expert interviews to infer the relationship between foundation quality and residential housing prices. A declining structural quality of a groundwork can have serious implications for the superstructure. This is hypothesized to be observed in transaction prices in the form of a discount. The municipality of Rotterdam, the Netherlands, forms the case study of focus for the research. Combining housing transaction data with foundation examination reports, property characteristics, and fixed effects by means of a hedonic pricing model serves the quantitative analysis. A sample of 921 microtransactions is used to reveal that a degradation of foundation quality of one on a scale of one to six is coupled with a -2.28% decrease in residential housing value. Further regression analysis illustrates that impairment to concrete foundations results in the most severe discount of -14.01% per level, relative to concrete foundations this price adjustment is -1.22% for non-piledriven groundworks. Supplementary expert interviews serve to corroborate these findings and situate them in a broader context. Additionally, consumer behavior, biases, and asymmetric information are explored in relation to the price-determining effects of foundations.

Item Type: Thesis (Master)
Degree programme: Real Estate Studies
Supervisor: Nozeman, E.F. and Mawhorter, S.L.
Date Deposited: 18 Mar 2022 10:57
Last Modified: 18 Mar 2022 10:57
URI: https://frw.studenttheses.ub.rug.nl/id/eprint/3797

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