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VALUE COMPONENTS OF HISTORIC RESIDENTIAL PROPERTIES: Evidence from Budapest Real Estate Market.

Abstract
By : David Kutasi

 
There are plenty of historic buildings bearing different stylistics in Budapest and many of them have residential function. In the city center of Pest, most of the properties are historic buildings constructed between the period of the Austro-Hungarian Compromise in 1876 and the World War II, but Buda also has some residential dwellings with historic value. Estimation of the value of the Budapest residential housing is an important issue for owners, real estate developers and investors, nevertheless not many studies have focused on the value components of those buildings in Central Eastern Europe or Hungary.
In this paper the value components of Budapest residential flats were identified using the hedonic regression method. On a sample of more than 1800 residential properties of Budapest the differences between historic, panel and other buildings were compared. The conclusion can be drawn that altering aspects are relevant for each segment. Even the categories determine large differences between panel buildings and non-panel buildings regarding the value. For the historic properties, the existence of balcony, the up-to-date type of heating, the good condition of the flat, the unique panorama, the location in Pest City, the vicinity of parks and the distance from noisy facilities are the most important factors. Meanwhile for panels the allocation on lower floors, the better heating system, the good condition, the location in Buda and the vicinity of market are the factors that have the major positive effect on the value. For the non-historic and non-panel buildings the balcony, the up-to-date heating system, the good condition, the luxurious Buda district location, vicinity of parks and remoteness of noisy facilities are the most important components of value.
Keywords: Hedonic Pricing Method, Budapest, Historic Buildings, Residential Property, Value Components.

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