Do residential reconversions affect residential property values? An investigation based on Québec city (Canada)

Residential reconversion can foster density and change the structure of neighborhoods. It also upsets current residents when it affects or obstructs their original panorama. Many nearby homeowners argue that new construction of visually imposing residential buildings negatively affects the value of their house. The aim of this paper is to test such a presumption by investigating whether single-family houses’ prices are affected (or not) by being close to reconversions. The analysis is based on an exhaustive data set of residential reconversions that were recorded between 2006 and 2016 and is combined with a database of single-family transactions sold in Quebec City between 2004 and 2017. The results suggest that residential reconversions lead to a mean net price premium of about 2.48%. This effect, however, varies according to the type of residential reconversion as well as to the density of the reconversions. Results show no negative significant effects, which suggests that the reduction in house prices expected by residents, i.e., sellers, is largely compensated for by buyers’ attraction, as expressed by market equilibrium.