Coastal Neighbourhood in Decline: Property Market Response in Indonesia's Coastal Flood-Prone areas

Coastal neighborhoods in the Global South are now experiencing severe challenges due to climate change, land subsidence, and uncontrolled land use change. The decline of coastal neighborhoods occurs due to not only coastal hazards but also the lack of adaption from the property market. Urban planners and policymakers must thus conceptually and practically understand how to prevent the decline of coastal neighborhoods. However, although the idea of property-based neighborhood change and decline is conceptually well established, it remains unclear how the property market demonstrates the process of neighborhood decline in practice. Thus, this study aims to answer the following research question: To what extent do property markets demonstrate a process of decline in coastal neighborhoods? This study argues that the property market’s response to coastal flood risk can reflect the process of declining coastal neighborhoods in practice. This thesis extends Grigsby et al.’s (1987) theory, which attributes neighborhood change to housing disinvestment due to financial constraints and property ownership changes, by considering property market behavior based on the hedonic property model initiated by Rosen (1974).