Effect of green labelling on residential property price: a case study in Hong Kong

Jayantha Wadu Mesthrige, Wan Sze Man

Research output: Journal article publicationJournal articleAcademic researchpeer-review

39 Citations (Scopus)


Purpose – It is known that people's expectation towards their living “green” is increasing. Green features are now regarded as one of the important considerations of buyers in purchasing a property. This research paper aims to investigate the significance of the green features of residential buildings to property buyers. Design/methodology/approach – HK-BEAM certification and HK-GBC Award are used as the measurement of green residential buildings. The study used a hedonic price model to determine whether there is a relationship between green features and residential property price and the influence of green features on the residential property price if there is such relationship. Findings – The empirical results show that green features have a significant and positive relationship with residential property price. People are willing to pay more for green buildings recognized by HK-BEAM and HK-GBC. They are willing to pay a sale price premium ranging from 3.4 percent to 6.4 percent. Furthermore, a relatively larger premium is found in Hong Kong Island compared to the New Territories. Research limitations/implications – The results imply that environmentally friendly green buildings both increase the value of a property and attract property buyers; and well-recognized green building schemes add value to properties and hence increase the property price. Originality/value – The study has contributed an indication of the amount a buyer would be willing to pay for quality green buildings as a reference for users, developers and investors. The study sheds light on the ability of the market to capitalize environmental considerations in investment decisions.
Original languageEnglish
Pages (from-to)31-51
Number of pages21
JournalJournal of Facilities Management
Issue number1
Publication statusPublished - 15 Feb 2013


  • Green buildings
  • Green labels
  • HK-BEAM scheme
  • HK-GBC awards
  • Hong Kong
  • Prices
  • Property price
  • Residential property

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management of Technology and Innovation


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