Hedonic price effects of homeworking under the COVID-19: evidence from housing markets in Guangzhou, China

Abstract

The COVID-19 pandemic has prompted homeworking to become a ‘new normal’. Consequently, the effects of various homeworking-related housing attributes on housing prices may be changed. However, few studies have explicitly examined if and how the practice of homeworking changes the associations between these particular housing attributes and housing prices. In light of this, based on a database of 2-year property transaction records in Guangzhou, China, this study develops several multilevel hedonic price models and multilevel difference-in-differences (DID) hedonic price models to delve into the COVID-19-induced variations in such housing attributes-housing prices associations. Our findings are as follows. (1) The practice of homeworking seems not to have fundamentally changed the effects of homeworking-related housing attributes on housing prices (suggested by the unchanged coefficient directions between pre- and post-COVID models); (2) Significant differences do exist in magnitudes of the effects of homeworking-related housing attributes on housing prices between pre- and post-COVID periods; (3) Those attributes (associated with homeworking space, convenient commute between workplace and home, and necessary needs of daily shopping and services) that facilitate homeworking tend to have higher price premiums and/or lower price discounts. This study provides novel evidence on hedonic price effects of homeworking in housing markets and their variations from pre-COVID to Post-COVID periods, which enriches the recently heated debates on property market responses to COVID-19.