Impact of infill development on prices of existing apartments in Finnish urban neighbourhoods

    Hannele AHVENNIEMI Affiliation
    ; Kyösti PENNANEN Affiliation
    ; Antti KNUUTI Affiliation
    ; Anne ARVOLA Affiliation
    ; Kauko VIITANEN Affiliation


Popularity of infill development is increasing because of the environmental benefits and cost saving potential it provides, which relate to the possibility to use existing infrastructure and services. However, the impact of infill development on value of existing properties has not been studied to a sufficient extent. Therefore, the aim of our study is to analyse whether infill development affects the prices of existing apartments. We carried out statistical analysis based on data from seven case neighbourhoods, and prices of more than 6000 housing transactions from one decade. The results of our analysis do not support the hypothesis of infill development affecting positively existing housing prices, but neither did the study show a significant negative effect. Both amenity effect and negative externalities may provide explanations as to why property values do not change due to infill development.

Keyword : infill development, housing prices, urban neighbourhood, property value, price development

How to Cite
AHVENNIEMI, H., PENNANEN, K., KNUUTI, A., ARVOLA, A., & VIITANEN, K. (2018). Impact of infill development on prices of existing apartments in Finnish urban neighbourhoods. International Journal of Strategic Property Management, 22(3), 157-167.
May 16, 2018
Abstract Views
PDF Downloads
SM Downloads
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.


Alonso, W. (1964). Location and land use. Cambridge: Harvard University Press.

Angrist, J. D., & Pischke, J.-S. (2008). Mostly harmless econometrics: an empiricist’s companion. Princeton University Press.

Arvola, A., & Pennanen, K. (2014, October). Understanding residents’ attitudes towards infill development at Finnish urban suburbs. World Sustainable Building Conference (WSB14). Barcelona. ISBN: 978-84-697-1815-5.

Baum-Snow, N. (2007). Suburbanization and transportation in the monocentric model. Journal of Urban Economics, 62, 405-423.

Bertaud, A. (2004). The spatial organization of cities: deliberate outcome or unforeseen consequence? World development report 2003: dynamic development in a sustainable world. World Bank. Retrieved from

Biddle, T., Bertoia, S., Greaves, S., & Stopher, P. (2006). The costs of infill versus greenfield development – a review of recent literature: a review of recent literature. 29th Australian Transport Review. 29th Australian Transport Research Forum, Gold Coast, Queensland, Australia.

Blanchard, C., Clegg, E., & Martin, L. (2008). The consequences of residential infill development on existing neighborhoods in the Treasure Valley. Project Report. Urban Land Institute, Idaho/Smart Growth, Idaho, Boise, Idaho, USA. Retrieved from

Brennan, M., Olaru, D., & Smith, B. (2014). Are exclusion factors capitalised in housing prices?. Case Studies on Transport Policy, 2(2), 50-60.

Camagni R., & Capello R. (2008). An ex-ante evaluation of an urban project through property value increases: an hedonic price approach. In A. Khakee, A. Hull, D. Miller, & J. Woltjer (Eds.), 2008: New Principles in Planning Evaluation (pp. 103-137). Ashagate, Aldershot.

Card, D., & Krueger, A. B. (1994). Minimum wages and employment: a case study of the fast-food industry in New Jerseyand Pennsylvania. American Economic Review, 84(4), 772-793.

Ciccione, A. (2002). Agglomeration effects in Europe. European Economic Review, 46(2), 213-227.

Clark, T. A. (2013). Metropolitan density, energy efficiency and carbon emissions: multi-attribute tradeoffs and their policy implications. Energy Policy, 53, 413-428.

Cortright, J. (2009). Walking the walk: how walkability raises home values in U.S. cities. CEOs for Cities. Retrieved from

Damigos, D., & Anyfantis, F. (2011). The value of view through the eyes of real estate experts: a fuzzy Delphi approach. Landscape and Urban Planning, 101(2), 171-178.

Day, B. H. (2001). The theory of hedonic markets: obtaining welfare measures for changes in environmental quality using hedonic market data. Centre for Social and Economic Research on the Global Environment (CSERGE): London, UK. Retrieved from

Debrezion, G., Pels, E., & Rietveld, P. (2007). The impact of railway stations on residential and commercial property value: a meta-analysis. Journal of Real Estate Finance and Economics, 35(2), 161-180.

Des Rosiers, F., Lagana, A., & Thériault, M. (2001). Size and proximity effects of primary schools on surrounding house values. Journal of Property Research, 18(2), 149-168.

Dye, R. F., & McMillen, D. P. (2007). Teardowns and land values in the Chicago metropolitan area. Journal of Urban Economics, 61(1), 45-63.

Ellen, I. G., Susin, S., Schwartz, A. E., & Schill, M. (2001). Do homeownership programs increase property value in low income neighborhoods? Low-Income Homeownership Working Paper Series, LIHO-01.13. Joint Center for Housing Studies Harvard University.

Espey, M., & Lopez, H. (2000). The impact of airport noise and proximity on residential property values. Growth and Change, 31(3), 408-419.

Falkenbach, H., & Nuuja, K. (2007, May). Flat ownership and registration in Europe, an overview. In Strategic Integration of Surveying Services, FIG Working Week 2007, Hong Kong SAR, China, 2007. Retrieved from

Fejarang, R. A. (1994, January). Impact on property values: a study of the Los Angeles metro rail. Preprint, Transportation Research Board, 73rd Annual Meeting, 1994. Washington, D.C.

Forrest, D., Glen, J., & Ward, R. (1996). The impact of light rail system on the structure of house prices. Journal of Transport Economics and Policy, 30(1), 15-29.

Gibbons, S., & Machin, S. (2005). Valuing rail access using transport innovations. Journal of Urban Economics, 57(1), 148-169.

Glaeser, E. L., & Kahn, M. E. (2010). The greenness of cities: carbon dioxide emissions and urban development. Journal of Urban Economics, 67, 404-418.

Haaland, C., & Bosch, C. K. (2015). Challenges and strategies for urban green-space planning in cities undergoing densification: a review. Urban Forestry & Urban Greening, 14(4), 760-771.

Han, J. H., & Elliott, P. (2013, May). Impact of high voltage over-head transmission lines on property value. In S. L. Kajewski, K. Manley, & K. D. Hampson (Eds.), Proceedings of the 19th CIB World Building Congress, Brisbane 2013: Construction and Society. Brisbane, Australia, Queensland University of Technology.

Hülagü, T., Kızılkaya, E., Özbekler, A. G., & Tunar, P. (2015). A hedonic house price index for Turkey. Central Bank of the Republic of Turkey. Retrieved from

Jun, M.-J. (2012). Redistributive effects of bus rapid transit (BRT) on development patterns and property values in Seoul, Korea. Transport Policy, 19(1), 85-92.

Kay, A. I., Noland, R. B., & DiPetrillo, S. (2014). Residential property valuations near transit stations with transit-oriented development. Journal of Transport Geography, 39, 131-140.

Kholdy, S. K., Muhtaseb, M. R., & Yu, W. (2014). Effect of an open-air, mixed-use shopping center on the prices of near-by residential properties. Journal of Real Estate Practice and Education, 17(1), 1-18.

Ki, C. O., & Jayantha, W. M. (2010). The effects of urban redevelopment on neighbourhood housing prices. International Journal of Urban Sciences, 14(3), 276-294.

Kong, F., Yin, H., & Nakagoshi, N. (2007). Using GIS and landscape metrics in the hedonic price modeling of the amenity value of urban green space: a case study in Jinan City, China. Landscape and Urban Planning, 79(3-4), 240-252.

Kovacs, K. F. (2012). Integrating property value and local recreation models to value ecosystem services from regional parks. Landscape and Urban Planning, 108(2-4), 79-90.

Krause, A. L., & Bitter, C. (2012). Spatial econometrics, land values and sustainability: trends in real estate valuation research. Cities, 29(2), 519-525.

Kytö, H., Kral-Leszczynska, M., Tuorila, H., & Kiuru, J. (2014). Asuinalueiden elinkaarikestävyys pääkaupunkiseudulla [Lifespan sustainability of residential areas in the Helsinki Metropolitan Region]. Consumer Society Research Centre, Helsinki (in Finnish).

Laakso, S. (2012). Kaupunkien erikoistuminen ja kaupunkien verkostot [Specialisation of cities and cities’ networks]. In H. Loikkanen, S. Laakso, & I. Susiluoto (Eds.), Metropolialueen talous. Näkökulmia kaupunkitalouden ajankohtaisiin aiheisiin.

City of Helsinki Urban Facts. Retrieved from (in Finnish).

Litman, T. A. (2014). Economic value of walkability. Victoria Transport Policy Institute. Retrieved from

Lönnqvist, H. (2015). On the effects of urban natural amenities, architectural quality and accessibility to workplaces on housing prices: an empirical study on the Helsinki Metropolitan Area (Doctoral thesis). Aalto University, School of Engineering. City of Helsinki Urban Facts. Research Series 2015:5. Retrieved from

Mathur, S., & Ferrell, C. (2013). Measuring the impact of sub-urban transit-oriented developments on single-family home values. Transport Research Part A: Policy and Practice, 47, 42-55.

Matthews, P., Bramley, G., & Hastings, A. (2015). Homo economicus in a big society: understanding middle-class activism and NIMBYism towards new housing developments. Housing, Theory and Society, 32(1), 54-72.

McConnell, V., & Wiley, K. (2010). Infill development: perspectives and evidence from economics and planning. Resources for the Future. Washington, D.C. Retrieved from

McMillen, D. P., & McDonald, J. (2004). Reaction of house prices to a new rapid transit line: Chicago’s midway line, 1983–1999. Real Estate Economics, 32(3), 463-486.

Mills, E. S. (1967). An aggregative model of resource allocation in a metropolitan area. American Economic Review, 57(2), 197-210.

Ministry of the Environment. (2016). Asuntoalueiden kunnallistekniikan rakentamiseen myönnettävä määräaikainen valtionavustus [Temporary government subsidies for constructing infrastructure for residential areas]. Memorandum. 6.4.2016.

Muth, R. F. (1969). Cities and housing: the spatial pattern of urban residential land use. Chicago, IL: University of Chicago Press.

Nahlik, M. J., & Chester, M. V. (2014). Transit-oriented smart growth can reduce life-cycle environmental impacts and household costs in Los Angeles. Transport Policy, 35, 21-30.

Newell, T. A. (2010). Development and neighborhood revitalization: the effects of residential investment on property values in Durham, NC. Michigan Journal of Business, 2(2), 97-120.

Nykänen, V., Lahti, P., Knuuti, A., Hasu, E., Staffans, A., Kurvinen, A., Niemi, O., & Virta, J. (2013). Urban infill and residential redevelopment. VTT Technology 97. 162 p. + app. 3 p. Espoo. Retrieved from

Nykänen, V., Lahti, P., Knuuti, A., Kurvinen, A., Niemi, O., & Vihola, J. (2012). Tammelan täydennysrakentamisen edullisuus [Affordability of infill development in Tammela]. VTT Technical Research Centre of Finland, VTT-CR-04035-12 (in Finnish).

Ooi, J. T. L., & Le, T. T. T. (2013). The spillover effects of infill developments on local housing prices. Regional Science and Urban Economics, 43(6), 850-861.

Piekkola, H., & Susiluoto, I. (2012). Kaupunkialueiden taloudellinen kasvu ja aineettoman pääoman merkitys alueilla [Economic growth of cities and the significance of immaterial capital in these regions]. In H. Loikkanen, S. Laakso, & I. Susiluoto (Eds.), Metropolialueen talous. Näkökulmia kaupunki-talouden ajankohtaisiin aiheisiin. City of Helsinki Urban Facts. Retrieved from (in Finnish).

Pollakowski, H. O., Ritchay, D., & Weinrobe, Z. (2005). Effects of mixed-income, multi-family rental housing developments onsingle family housing values. Cambridge, MA: Massachusetts Institute of Technology, Center for Real Estate Research. Retrieved from

Rosen, S. (1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy, 82, 34-55.

Rosenthal, S. S., & Strange, W. C. (2004). Chapter 49: Evidence on the nature and sources of agglomeration economies, Handbook of Regional and Urban Economics, 4, 2119-2171.

Ryan, B. D., & Weber, R. (2007). Valuing new development in distressed urban neighbourhoods. Journal of the American Planning Association, 73(1), 100-111.

Santaoja, T. (2004). Täydennysrakentaminen kaupungin ja asui-nympäristön kehittämisessä [The role of infill construction in city and neighbourdhood development]. City of Helsinki, City Planning Department, Reports 2004:3.

Seppälä, T. (2013). Täydennysrakentamisen haasteet ja talous-, energia- ja ympäristövaikutukset [Challenges and economic, energy and environmental impacts of infill building]. Licentiate thesis. Aalto University, School of Engineering. Retrieved from

Thamrongsrisook, C. (2011). The influence of rapid transit systems on condominium prices in Bangkok. A hedonic price model approach. Thesis no. 105. KTH, School of architecture and the built environment. Retrieved from!/Menu/general/column-content/attachment/105.pdf

Tse, R. Y. C., & Love, P. E. D. (2000). Measuring residential property values in Hong Kong. Property Management, 18(5), 366-374.

Tyrväinen, L. (1999). Monetary valuation of urban forest amenities in Finland. Academic dissertation. Finnish Forest Research Institute, Research Papers, 739, 53–76.

Votsis, A., & Perrels, A. (2016). Housing prices and the public disclosure of flood risk: a difference-in-differences analysis in Finland. Journal of Real Estate Finance and Economics, 53(4), 450-471.

Wen, H., Zhang, Y., & Zhang, L. (2014). Do educational facilities affect housing price? An empirical study in Hangzhou, China. Habitat International, 42, 155-163.

Zahirovich-Herbert, V., & Gibler, K. (2014). The effect of new residential construction on housing prices. Journal of Housing Economics, 26, 1-18.

Zhang, M., Meng, X., Wang, L., & Xu, T. (2014). Transit development shaping urbanization: evidence from the housing market in Beijing. Habitat International, 44, 545-554.

Send mail to Author

Send Cancel