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Does size matter? Is there an optimal size for tenant–owner associations?
Malmö University, Faculty of Culture and Society (KS), Department of Urban Studies (US).ORCID iD: 0000-0002-3133-6469
Malmö University, Faculty of Culture and Society (KS), Department of Urban Studies (US).ORCID iD: 0000-0001-5547-0710
2022 (English)In: Journal of European Real Estate Research, ISSN 1753-9269, E-ISSN 1753-9277, Vol. 15, no 3Article in journal (Refereed) Published
Abstract [en]

Purpose – The authors investigate how prices of condominiums are affected by the size of the tenant-owner associations that they belong to.

Design/methodology/approach – The authors use data of sold apartments in the Swedish municipality Malmö 2013–2018 and estimate hedonic price regressions. The authors also perform semi-structured interviews with three senior professionals in real estate companies.

Findings – The authors find significantly negative relationships between the prices of condominiums and the size of tenant-owner associations. Also, regression results indicate that associations should be no smaller than 6–10 apartments. The interviews support that associations should not be too small or too big. The lower and upper limit was suggested by the respondents to 40–50 and 80–150 apartments, respectively. In these ranges, economies of scale can be achieved, and residents will not lose the sense of community and responsibility.

Research limitations/implications – The authors do not prove causality. Smaller associations may have relatively exclusive common amenities, about which we lack data. The same relationships may not exist in different market conditions.

Originality/value – The authors are not aware of previous studies with the same research question. The size of tenant-owner associations may affect the price through different channels. First, several of the banks in Sweden do not always grant mortgages for condominiums that belong to small associations. Second, larger associations may have better economies of scale and more efficient property management. Third, homeowners may prefer smaller tenant-owned associations, because they may feel less anonymous and provide more influence on common amenities.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2022. Vol. 15, no 3
Keywords [en]
Hedonic price model, Tenant ownership, Concominium, Tenant-owner association
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:mau:diva-52162DOI: 10.1108/jerer-09-2021-0048ISI: 000805088800001Scopus ID: 2-s2.0-85131558385OAI: oai:DiVA.org:mau-52162DiVA, id: diva2:1665216
Available from: 2022-06-07 Created: 2022-06-07 Last updated: 2024-02-05Bibliographically approved

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Karpestam, PeterPalm, Peter

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