Analyzing The Impact of Preferential Location Charges on House Price: A Case of Kolkata

Abstract Book of the 5th World Conference on Climate Change and Global Warming

Year: 2025

DOI:

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Analyzing The Impact of Preferential Location Charges on House Price: A Case of Kolkata

Suryanshu Prakash, Dr. Ankhi Banerjee, Mr. Sovan Biswas

 

ABSTRACT:

This study investigates the impact of Preferential Location Charges (PLCs) on House prices in Kolkata, focusing on how premiums for higher floors, optimal property orientations, and cultural factors influence pricing trends. PLCs are additional fees imposed by developers for properties located in more desirable areas, such as higher floors, corner units, or those with better views, designed to capitalize on buyer preferences for features that enhance perceived home value. The hypothesis posits that PLCs significantly contribute to rising property prices, though the relationship between these charges and overall house values may be complex. To explore this, the study employs a Hedonic Pricing Model (HPM) to assess how location, transportation access, floor levels, and orientations affect property values. The analysis utilizes real estate transaction data and surveys from homebuyers, developers, and agents, providing a comprehensive understanding of market dynamics. Preliminary findings suggest that PLCs and premiums for higher floors and favorable orientations can increase property prices by 5% to 20%, particularly in well-connected areas such as metro corridors and IT hubs. Cultural preferences, including Vastu compliance and proximity to religious landmarks, further enhance these price premiums, as buyers are often willing to pay more for homes that align with their beliefs. These insights reveal how PLCs, floor premiums, and cultural influences collectively drive up housing costs, posing significant affordability challenges for middle-income buyers. The study emphasizes the need for policy reforms to address these challenges, ensuring a balance between market dynamics and the necessity for affordable housing solutions.

Keywords: Cultural Preference, Floor Premiums, Hedonic Price Model, Orientation, Real Estate