THE GREENSPACE PREMIUM OF HOUSING PRICES – IMPACT OF THE COVID-19 PANDEMIC

Abstract

This study aims to investigate the impact of COVID-19 on greenspace premiums. Earlier literature has found that there was a premium to live in proximity to green spaces, due to the myriad of physical health, mental wellbeing and socio-economic benefits. However, as COVID-19 has impacted multiple aspects of people’s lives, it is pertinent to study how the pandemic affects home buyers' willingness to pay for greenspace premium. A mixed research method will be utilised to provide a holistic understanding of the topic. Firstly, a quantitative research method will be employed to investigate the change in housing premiums for green spaces via a Differences-in-Differences regression. Next, a qualitative research method, specifically a thematic analysis, will be conducted through the analysis of interviewees to study the reasons for the potential changes in homebuyers’ mindsets. Evidence from this study has shown that while there is a positive greenspace premium for both before and after the pandemic, the amount of premium that homebuyers were willing to pay has decreased after COVID-19. Furthermore, by comparing the direction of change for the amount of premium for small and large green spaces, it is evident that homebuyers were generally not as willing to pay for small green spaces after the pandemic, however, they seem to be more appreciative of large green spaces. The reasons for these changes in greenspace premium highly depended on the lifestyles and the way that these homebuyers intend to interact with the green spaces.