Environment and value Does drinking water quality affect house prices?

Abstract

This research paper investigates the effect of drinking water quality on property values in Charlesbourg, a major municipality (70,000 inhabitants) of the Quebec City region where repeated water‐related health problems were experienced in 1990 and 1991. In this paper, 807 bungalow sales are sampled from the data bank of the Quebec Urban Community (QUC) Appraisal Division, and environmental information pertaining to local drinking water quality levels supplements data on physical, neighbourhood and access attributes. Our findings indicate that water‐related health hazards exert a detrimental and measurable impact on higher property values, with the average duration of the warning period per sector clearly emerging as the dominant factor. More precisely, market segmentation suggests that the higher the price of the property, the sharper the decline in market value because of this factor. In the current case study, the most severely affected properties of the upper third segment of the market experienced drops in value ranging from 5.2 to 10.3 percent of mean sale price.

Citation

Des Rosiers, F., Bolduc, A. and Thériault, M. (1999), "Environment and value Does drinking water quality affect house prices?", Journal of Property Investment & Finance, Vol. 17 No. 5, pp. 444-463. https://doi.org/10.1108/14635789910294877