Do Urban Rail Transit Facilities Affect Housing Prices? Evidence from China

Urban rail transit facilities play a critical role in citizen’s social activities (e.g., residence, work and education). Using panel data on housing prices and urban rail transit facilities for 35 Chinese cities for 2002 to 2013, this study constructs a panel data model to evaluate the effect of rail transit facilities on housing prices quantitatively. A correlation test reveals significant correlations between housing prices and rail transit facilities. Empirical results demonstrate that rail transit facilities can markedly elevate real estate prices. Quantitatively, a 1% increase in rail transit mileage improves housing prices by 0.0233%. The results highlight the importance of other factors (e.g., per capita GDP, land price, investment in real estate and population density) in determining housing prices. We also assess the effects of expectations of new rail transit lines on housing prices, and the results show that expectation effects are insignificant. These findings encourage Chinese policy makers to take rail transit facilities into account in achieving sustainable development of real estate markets.

[1]  C. Hewitt,et al.  The Effect of Proximity to Urban Rail on Housing Prices in Ottawa , 2012 .

[2]  Nicholas K Tulach,et al.  Evaluating the Economic Impacts of Light Rail by Measuring Home Appreciation , 2012 .

[3]  K. Chau,et al.  Determinants and Sustainability of House Prices: The Case of Shanghai, China , 2015 .

[4]  Luca Agnello,et al.  Booms and Busts in Housing Markets: Determinants and Implications , 2009, SSRN Electronic Journal.

[5]  D. B. Hess,et al.  Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York , 2007 .

[6]  Ying Zhang,et al.  Assessing the impact of the demographic dividend on real estate prices: empirical evidence from China , 2015 .

[7]  M. Lahr,et al.  The Impact of Hudson-Bergen Light Rail on Residential Property Appreciation , 2014 .

[8]  Daniel T. Winkler,et al.  The Dynamics of Metropolitan Housing Prices , 2002 .

[9]  Ming Zhang,et al.  Bus versus Rail , 2009 .

[10]  H. Wen,et al.  Do educational facilities affect housing price? An empirical study in Hangzhou, China , 2014 .

[11]  M. White,et al.  THE RESPONSIVENESS OF HOUSE PRICES TO MACROECONOMIC FORCES: A CROSS-COUNTR Y COMPARISON , 2001 .

[12]  Ting Lan.  House Price Bubbles in China , 2014 .

[13]  Arthur S. De Vany,et al.  An Economic Model of Airport Noise Pollution in an Urban Environment , 1976 .

[14]  S. Ryan.  The Value of Access to Highways and Light Rail Transit: Evidence for Industrial and Office Firms , 2005 .

[15]  John M. Quigley,et al.  Real Estate Prices and Economic Cycles , 2002 .

[16]  Yigang Wei,et al.  Using Urban-Carrying Capacity as a Benchmark for Sustainable Urban Development: An Empirical Study of Beijing , 2015 .

[17]  S. Lewis-Workman,et al.  Measuring the Neighborhood Benefits of Rail Transit Accessibility , 1997 .

[18]  Ming Zhang,et al.  Transit development shaping urbanization: Evidence from the housing market in Beijing , 2014 .

[19]  Kamruzzaman,et al.  Neighborhood Sustainability Assessment: Evaluating Residential Development Sustainability in a Developing Country Context , 2015 .

[20]  Allen C. Goodman,et al.  Relationship between urban land price and housing price: Evidence from 21 provincial capitals in China , 2013 .

[21]  C. Leung.  Economic Growth and Increasing Housing Price , 2003 .

[22]  J. Kushner,et al.  Canadian Inter-City House Price Differentials , 1986 .

[23]  Ling Shen.  Are house prices too high in China , 2012 .

[24]  Zhu Hong-liang.  Price Influence of Urban Mass Transit on Housing Projects Along the Line , 2007 .

[25]  J. Quigley,et al.  Economic Fundamentals in Local Housing Markets: Evidence from U.S. Metropolitan Regions , 2006 .

[26]  E. Takáts.  Aging and house prices , 2012 .

[27]  M. Kuby,et al.  Combined impacts of highways and light rail transit on residential property values: a spatial hedonic price model for Phoenix, Arizona , 2014 .

[28]  QU Feng,et al.  Bubble or riddle? An asset-pricing approach evaluation on China's housing market , 2015 .

[29]  Myung-Jin Jun,et al.  Redistributive effects of bus rapid transit (BRT) on development patterns and property values in Seoul, Korea , 2012 .

[30]  Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables , 2014 .

[31]  Subhrajit Guhathakurta,et al.  Spatial and Temporal Capitalization Effects of Light Rail in Phoenix , 2012 .

[32]  John M. Quigley,et al.  A Simple Hybrid Model for Estimating Real Estate Price Indexes , 1995 .

[33]  E. Glaeser,et al.  Urban Growth and Housing Supply , 2005 .

[34]  R Cevero.  TRANSIT-BASED HOUSING IN THE SAN FRANCISCO BAY AREA: MARKET PROFILES AND RENT PREMIUMS , 1996 .

[35]  Oliver F. Shyr,et al.  Does high-speed rail accessibility influence residential property prices? Hedonic estimates from southern Taiwan , 2010 .

[36]  The impact of land policy on the relation between housing and land prices: Evidence from China , 2011 .

[37]  A comparison of two housing markets , 2014 .