The value of a south-facing orientation: A hedonic pricing analysis of the Shanghai housing market

The relationship between the view orientation of an apartment and its property value is examined in the context of Shanghai housing market. Using a hedonic pricing model and a unique dataset, comprised of apartment attributes, ambient environmental indicators and urban spatial structure, shows that a south-facing orientation is associated on average with a 14% premium in property value. Among possible view orientations, due south reflects the highest price. A view of one Shanghai's landmark increases property values by 6%, with this premium being boosted a further 4% by south-facing orientation. Dust pollution lowers prices and shrinks the value of a south-facing view, while PM2.5, which is not visible, has little influence on either. Preference for height in apartment buildings is strongly influenced by the presence of elevators. Internal apartment attributes have the expected signs, but magnitudes can be misleading unless the larger set of apartment attributes is controlled for.