Abstract:
This paper aims to evaluate the impact of submarkets on water view premiums of residential properties and investigate the correlation between submarket view premium and socio-economic status. Over 53,000 residential sales transactions from 2004 through 2006 are analysed using the hedonic method. The Auckland Region is divided into 17 submarkets with similar water view scarcities. The region is analysed along with each individual submarket in order to determine if significant differences in view premiums exist. The empirical results indicate that the regionwide model chronically over- or under-estimates view premiums, for example, the regionwide model estimates that a wide water view adds 18% to a home,s value while the same view amenity adds only 5% in modest West Harbour but 54% in posh Mission Bay. This research fills a gap in the body of knowledge relating to water view externalities by investigating the differing price impacts across submarkets.