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The impact of renovations on house prices: evidence from a propensity score analysis

Changro Lee

International Journal of Housing Markets and Analysis2026https://doi.org/10.1108/ijhma-01-2026-0023article
AJG 1ABDC B
Weight
0.50

Abstract

Purpose House renovations are regarded as advantageous due to their potential to increase property value. Despite this benefit, assessing the effects of renovation on house prices is complicated because of the relatively small share of renovated houses in the market. This study aims to address this challenge by using a causal inference approach to analyze the relationship between renovations and property prices. Design/methodology/approach Propensity score matching was used to identify non-renovated houses that are comparable to renovated properties, enabling a more precise evaluation of renovation effects. In addition, a generalized additive model was used to examine the relationship between renovation scope and house prices. Findings The results indicate that renovation leads to a price increase of KRW 44.12m in Gyeonggi province and KRW 10.56m in Chungnam province. At relatively low levels of renovation, renovation activity has only a limited impact on prices. As renovation scope increases, price appreciation becomes more pronounced and reaches a peak at an intermediate level of renovation. Beyond this point, further increases in renovation scope are associated with declining prices, indicating diminishing returns at higher levels of renovation intensity. Originality/value This study reveals that renovation effects are context-dependent, especially regarding renovation intensity and identifies the renovation scope under which renovation investments are capitalized into house prices.

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https://doi.org/https://doi.org/10.1108/ijhma-01-2026-0023

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@article{changro2026,
  title        = {{The impact of renovations on house prices: evidence from a propensity score analysis}},
  author       = {Changro Lee},
  journal      = {International Journal of Housing Markets and Analysis},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1108/ijhma-01-2026-0023},
}

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The impact of renovations on house prices: evidence from a propensity score analysis

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.