Potential impact of property management on the market value of dwellings in multi-owned housing

Abstract

AbstractThe expanding role of property management services and the increasing share of multi-owned housing in many housing markets raises issues concerning the impact of such services on property value in this sector. The presented study investigated the potential impact of property management on the market value of dwellings in multi-owned housing developments. This impact was identified based on estimated implicit values of the extracted common property attributes dependent on property management services. An original research methodology tailored to the institutional arrangement in multi-owned housing developments was used, involving the estimation of hedonic regression models. Empirical research was conducted on representative samples of multi-owned housing developments in the housing market of the city of Olsztyn, Poland. The results showed that common property attributes such as building condition, building accessibility, cleanliness and orderliness, and land development significantly influenced dwelling prices and thus their market value. In extreme cases, the cumulative potential impact of property management services estimated on this basis can reach up to ca. 30% of the dwellings’ value. These findings have far-reaching policy and practical implications for urban development policies, including the built environment, land use and local housing, as well as for housing market investors and developers, homeowners associations, dwelling owners and property managers. Hence, it is recommended to expand research on this topic to other housing markets functioning in different institutional arrangements.