No doubt, all these initiatives would encourage real estate provider stakeholders to introduce more green features to their developments. However, some question the cost-saving effects of green buildings ([39] Shimizu, 2010). One must remember that the cost of constructing green buildings is relatively higher than conventional buildings (although higher initial capital costs are offset by the long-run lower running costs during the entire life of the property). For example, [14] Gomez (2008) reports a 5-20 percent construction cost premium associated with green construction. In addition, [31] Miller et al. (2008) and [25], [26] Kats (2003, 2006) also find green buildings cost 2-4 percent more than conventional buildings. [25] Kats (2003) found that it costs, on average, only 1.8 percent more to design and construct greener buildings. Thus, there are two important questions to be answered in the realization of the goal of low-carbon living:
Are buyers willing to pay more for green features or buildings?
How are green buildings valued in the market?
This is the threshold for this research.
This research paper aims to investigate the relationship between green features and property price in the residential sector. We define residential properties as "green buildings" if they are recognized with certificates/awards issued by HK-BEAM and HK-GBC. The study is limited only to private residential developments as the prices of private properties are determined by the market forces, whereas those in the public sector are not.