The Impact of External, Environmental, and Neighbourhood Factors on Housing Prices in Stavanger - A hedonic price model study

Abstract

A dwelling is made up of a bundle of attributes, all of which may affect its value. Hedonic pricing models are usually used in to estimate the value of these individual attributes. Few hedonic price studies however, have focused on the Norwegian housing market. The aim of this thesis is to study factors that may affect housing prices in Stavanger. The hedonic price model was used to analyse these factors. The thesis focuses on external, environmental and neighbourhood attributes. These factors have previously been neglected in Norwegian hedonic house price models. In order to do this, micro-level data were collected from Eiendomsverdi.no and Finn.no. The databases include information sold dwellings and its respective characteristics. The data obtained resulted in a carefully collected and original dataset. The result from the estimated regression model was that external and environmental characteristics affect housing prices to a lesser degree. Neighbourhood characteristics appears to have a greater impact on the housing prices in Stavanger.