Exploring property orientation preferences and local variations
ISSN: 0263-7472
Article publication date: 28 September 2023
Issue publication date: 3 June 2024
Abstract
Purpose
Properties with specific orientations are preferred in South Korea, depending on the real estate market. This preference is usually considered during property transactions and in designing buildings. Despite the importance of property orientation, the magnitude of preference for favored orientation has rarely been empirically estimated in the literature. This study attempts to estimate the value of favored orientation in a quantitative manner and interpret the results.
Design/methodology/approach
Using a geographically weighted regression model, this study obtains nationwide property price data and estimates the strength of orientation preference, that is, the premium for favored orientation. Among the various property types, residential sites and forests were investigated because the orientation of these two property types is known to influence their sales prices in the Korean real estate market.
Findings
The results show that premiums for south-facing residential sites exist in the market, varying locally and ranging from zero to 13.2%, over residential sites with non-south orientations. The results for forests are mixed in that a south-facing forest commands a maximum of 33.1% premium in a certain region, over a forest with a non-south direction, while it also commands a maximum of 33.8% negative premium (discount) in another region, indicating significant local variations in premiums.
Originality/value
These findings are expected to be utilized in fields such as property valuation, house architecture and design.
Keywords
Citation
Lee, C. (2024), "Exploring property orientation preferences and local variations", Property Management, Vol. 42 No. 3, pp. 353-362. https://doi.org/10.1108/PM-06-2023-0048
Publisher
:Emerald Publishing Limited
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