Effect of Neighbourhood Crime on Residential Property Values: A Review of Literature

Abstract

The effect of Neighbourhood crime has a detrimental effect on residential property values, often discouraging investment in residential real estate. This paper presents a review of empirical studies on the effect of neighbourhood crime on property values. The purpose of the review is to summarise current knowledge about the influence of neighbourhood crime on residential property value. The literature was rigorously sourced from platforms such as Emerald, ScienceDirect, SAGE, and Google Scholar. The findings reveal a consistent inverse relationship between property crime and residential property values, with higher crime rates leading to decreased housing prices across various geographic contexts, including Europe and developing economies. Proximity to crime hot spots and incidents of burglary and vandalism significantly reduce property values due to safety concerns among buyers. Methodologies such as hedonic pricing models and regression analyses were frequently employed. The review observed the limited focus on the effect of crime on residential property values in developing economies. It is recommended that further research be carried out on the impact of neighborhood crime on residential property values in developing economies to better understand the unique aspects of this social issue. Government and relevant agencies should also focus on this area of study, as it can contribute to promoting sustainable housing solutions that support healthier living environments.