Analysis of the impact of flooding in the real estate value in lajeado city, brazil - case study for single-family homes

Abstract

The market value of a property is an important parameter for decision making in various sectors of society. The selection and identification of the aspects that most influence the variation of the property value are fundamental, because it is from these considerations that we can develop explanatory models to establish the property value. In Lajeado, a city in southern Brazil, floods resulting from the Taquari river are a phenomenon that occurs with some frequency. This study aims at investigating the influence of these floods on urban real estate values. We analyzed the single-family home segment through a hedonic pricing model. Data were obtained from the local real estate market. The calculated model showed good statistical performance, following the regression analysis requirements. Results indicate that residential properties located in flood-prone areas have a 16% lower value than properties located outside these areas.