Estimating view premiums in high-rise residential housing : hedonic evidence and implications for data-driven valuation

Abstract

Residential valuation under the comparison principle requires systematic adjustment for material differences between comparable units. In high-density, high-rise housing markets, however, visual amenities such as harbour and skyline views are often treated qualitatively or implicitly embedded in comparable evidence, reducing transparency and auditability. This study examines whether view quality is systematically capitalized into transaction prices in Hong Kong and whether such premiums vary across market conditions. Using 352 secondary market transactions from six prime high-rise estates (2015–2024), we estimate hedonic models with the logarithm of price per saleable area as the dependent variable. View quality is specified as an ordered categorical variable (nil, partial, full), constructed from listing descriptions and cross-validated using map and street-view evidence. Controlling for floor level, estate age, monthly market movements proxied by the Centa-City Index (CCI), and estate fixed effects, the pooled estimates indicate that partial views command an approximate 11% premium and full views an approximate 22% premium relative to nil view, with a clear incremental premium for full over partial views. Split-sample estimation using GDP-defined regimes reveals partial state dependence: full view premiums remain economically meaningful across market conditions, whereas partial view effects become less precisely identified during weaker periods. The findings demonstrate that view quality is a material and systematically priced attribute in Hong Kong’s vertically differentiated housing market. By providing transparent percentage-based adjustment benchmarks grounded in within-estate variation, the study enhances the consistency, transparency, and evidential rigor of comparable-based valuation practice.