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The Effects of Expected Transport Improvements on Housing Prices

Author

Listed:
  • C.Y. Yiu

    (Department of Building and Real Estate, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, bscyyiu@polyu.edu.hk)

  • S.K. Wong

    (Department of Real Estate and Construction, The University of Hong Kong, Pokfulam, Hong Kong, skwongb@hkusua.hku.hk)

Abstract

Improvements in transport were commonly found to have a positive effect on the price of housing. As the construction of infrastructure often lasts for years, it is plausible to assume that investors will take expected improvements into consideration when pricing and trading neighbourhood properties. However, there have been few investigations of such effects. This paper is an empirical study of whether premiums were paid for the expected benefits offered by a new tunnel before its completion. The results showed that there were positive price expectation effects well before the completion of the tunnel. The expectation effects allow the government to finance infrastructure projects by selling land in the affected districts in advance.

Suggested Citation

  • C.Y. Yiu & S.K. Wong, 2005. "The Effects of Expected Transport Improvements on Housing Prices," Urban Studies, Urban Studies Journal Limited, vol. 42(1), pages 113-125, January.
    • Handle: RePEc:sae:urbstu:v:42:y:2005:i:1:p:113-125
    DOI: 10.1080/0042098042000309720
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    References listed on IDEAS

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    Cited by:

    1. Dubé, Jean & Legros, Diègo & Devaux, Nicolas, 2018. "From bus to tramway: Is there an economic impact of substituting a rapid mass transit system? An empirical investigation accounting for anticipation effect," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 73-87.
    2. Dubé, Jean & Rosiers, François Des & Thériault, Marius & Dib, Patricia, 2011. "Economic impact of a supply change in mass transit in urban areas: A Canadian example," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 46-62, January.
    3. Chen, Zhenhua & Haynes, Kingsley E., 2015. "Impact of high speed rail on housing values: an observation from the Beijing–Shanghai line," Journal of Transport Geography, Elsevier, vol. 43(C), pages 91-100.
    4. Papon, Francis & Nguyen-Luong, Dany & Boucq, Elise, 2015. "Should any new light rail line provide real estate gains, or not? The case of the T3 line in Paris," Research in Transportation Economics, Elsevier, vol. 49(C), pages 43-54.
    5. Karolien De Bruyne & Jan Van Hove, 2013. "Explaining the spatial variation in housing prices: an economic geography approach," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1673-1689, May.
    6. Mitra, Suman K. & Saphores, Jean-Daniel M., 2016. "The value of transportation accessibility in a least developed country city – The case of Rajshahi City, Bangladesh," Transportation Research Part A: Policy and Practice, Elsevier, vol. 89(C), pages 184-200.
    7. Ekaterina Chernobai & Michael Reibel & Michael Carney, 2011. "Nonlinear Spatial and Temporal Effects of Highway Construction on House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 42(3), pages 348-370, April.
    8. Morito Tsutsumi & Hajime Seya, 2008. "Measuring the impact of large‐scale transportation projects on land price using spatial statistical models," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 385-401, August.
    9. Valeriia Budiakivska & Luca Casolaro, 2018. "Please in my back yard: the private and public benefits of a new tram line in Florence," Temi di discussione (Economic working papers) 1161, Bank of Italy, Economic Research and International Relations Area.
    10. Murakami, Jin & He, Yiming, 2018. "Highway investment in deindustrialization: A territorial analysis of office property transactions in Hong Kong, 2002–2013," Journal of Transport Geography, Elsevier, vol. 66(C), pages 200-212.
    11. Tideman, Nicolaus & Plassmann, Florenz, 2018. "The effects of changes in land value on the value of buildings," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 69-76.
    12. Dubé, Jean & Thériault, Marius & Des Rosiers, François, 2013. "Commuter rail accessibility and house values: The case of the Montreal South Shore, Canada, 1992–2009," Transportation Research Part A: Policy and Practice, Elsevier, vol. 54(C), pages 49-66.
    13. Gjestland, Arnstein & McArthur, David Philip & Osland, Liv & Thorsen, Inge, 2014. "The suitability of hedonic models for cost-benefit analysis: Evidence from commuting flows," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 136-151.
    14. George E. Peterson, 2008. "Unlocking Land Values to Finance Urban Infrastructure," World Bank Publications - Books, The World Bank Group, number 6552, December.
    15. Chau-kiu Cheung & Kwan-kwok Leung, 2008. "Retrospective and prospective evaluations of environmental quality under urban renewal as determinants of residents’ subjective quality of life," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 85(2), pages 223-241, January.
    16. Ti-Ching Peng & Ying-Hui Chiang, 2015. "The non-linearity of hospitals' proximity on property prices: experiences from Taipei, Taiwan," Journal of Property Research, Taylor & Francis Journals, vol. 32(4), pages 341-361, December.
    17. Siman Tang & Hong Lo, 2010. "On the financial viability of mass transit development: the case of Hong Kong," Transportation, Springer, vol. 37(2), pages 299-316, March.

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