The Effects of Expected Transport Improvements on Housing Prices

Posted: 11 Sep 2008

See all articles by Edward Chung Yim Yiu

Edward Chung Yim Yiu

University of Auckland Business School

Siu Kei Wong

University of Hong Kong

Date Written: September 11, 2008

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.

Keywords: transportation improvement works, housing price expectation, panel data, hedonic pricing model, price index, price gradient

JEL Classification: R41

Suggested Citation

Yiu, Edward Chung Yim and Wong, Siu Kei, The Effects of Expected Transport Improvements on Housing Prices (September 11, 2008). Urban Studies, Vol. 42, No. 1, 2005, Available at SSRN: https://ssrn.com/abstract=1266448

Edward Chung Yim Yiu (Contact Author)

University of Auckland Business School ( email )

Sir Owen G Glenn Building
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Auckland, 1024
New Zealand
+64 923 3913 (Phone)

HOME PAGE: http://https://unidirectory.auckland.ac.nz/people/profile/edward-yiu

Siu Kei Wong

University of Hong Kong ( email )

Pokfulam Road
Hong Kong, HK
China

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