The influence of urban violence and land title irregularity on the market value of properties: A case study in Belem, an Amazon metropolis

As has occurred with many other cities and in several emerging countries, Belem, has been occupied in a haphazard fashion without any formal planning. The high demand for living space and high cost of housing have forced people to occupy peripheral areas of cities, generating social problems that instead of being solved are actually intensifying. Urban violence and land title irregularity are some of the serious problems both for society in general and for the real estate sector, which has become more dynamic in recent years because of expanding credit. However, this economic segment faces major difficulties in its investments and its commercial transactions, often with significant losses or reductions in prices, which is in part due to these problems. This paper seeks to contribute towards understanding the real estate markets of cities in emerging countries that have such characteristics of violence and irregularity, with the objective of quantifying the influence of these variables on the price of residential properties, using as a reference the city of Belem, capital of the State of Para (Brazil). For the study samples were collected in 6 distinct city neighborhoods, for a total of 28 items that were treated with inferential statistics and by the coast and hedonic approaches in order to analyze the variation in their value. The results achieved show a depreciation or reduction in value of up to 67%, depending on the area or neighborhood analyzed. The greatest share in variation of value was caused by location, as was expected, followed by urban violence and land-title irregularity, with percentages of 34%, 22% and 11% respectively. (C) 2013 Elsevier Ltd. All rights reserved.