Working Paper Series,
Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: Public preferences for classical architecture are well known, yet the economic impact of such styles in new housing developments remains unclear. This study examines whether neo-traditional architectural design influences higher apartment prices in Stockholm, thereby addressing a gap in real estate valuation research. Using 16,508 housing transactions from 2017 to 2021, we apply hedonic price models, spatial econometrics, and propensity score matching to estimate the price effect of neo-traditional style while controlling for location, housing attributes, and selection bias. Results show that apartments in neo-traditional buildings command a 5–6% price premium, with the effect most substantial in lower-priced segments. These findings suggest that architectural style influences housing value independently of location or other housing features. Our results highlight how aesthetic preferences affect market outcomes and support the use of spatial methods in valuation research. The findings have implications for urban design, architectural policy, and housing market strategies.

Keywords: Neo-traditional architecture; housing price premium; hedonic pricing; spatial econometrics; urban housing market; architectural aesthetics; real estate valuation; cultural heritage; Stockholm housing market; real estate economics

JEL-codes: C21; R21; Z18

Language: English

29 pages, August 22, 2025

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