The effect of ground leases on house prices in Helsinki
Research output: Contribution to journal › Article › Scientific › peer-review
|Number of pages||20|
|Journal||Journal of Housing and the Built Environment|
|Publication status||Published - 11 Sep 2015|
|Publication type||A1 Journal article-refereed|
One imperfection in housing markets is imperfect knowledge about legal interests such as ground leases. Both actual reduced legal interest as well as uncertainty surrounding rights and future lease payments for houses constructed on leased land may affect prices relative to houses built on freehold land. We use regression analysis of sales prices of condominium transactions in Helsinki to examine the effect ground leases have on house prices. We find that prices on condominiums constructed on leased lots are discounted at least 5 %, on average. In addition, we see that the announcement of potentially large increases in base rents upon renewal contributes to the discount.
- Condominium, Finland, Ground leases, House prices, Housing markets