An empirical study on the effects of the cross-boundary infrastructureon property market in Hong Kong

Abstract

While regional infrastructures are being actively pursued by the Hong Kong governments in recent years, the impacts brought by the cross-boundary infrastructures have not been comprehensively scrutinized. This study is aimed to fill in the research gap by examining the interrelationships between regional planning, transport planning and real estate economics.

As concerns on accessibility and transport convenience are key factors determining the price of a flat, transport improvements made to the residential area should lead to an increase in residential property prices. On the other hand, as regional infrastructures are often justified with their impacts in fostering further economic development, retail rental prices in the service coverage areas should experience positive impacts. Therefore, changes in price gradient of residential properties, and that in transaction prices of commercial properties will be both taken into consideration in understanding the impacts of regional infrastructures. When examining these impacts, an additional dimension will be incorporated to investigate the impacts across the initial stage, planning stage, post-feasibility stage, construction stage as well as the post-project completion stage of the projects. Hedonic pricing models will be applied in this study for assessment.

The empirical case will focus on the Hong Kong-Shenzhen Western Corridor (SWC) project and the associated areas of Tin Shui Wai, Yuen Long and Tusen Wan, to obtain the relevant data to understand the interrelationships across the different stages of the SWC project. In the research finding, as far as residential property sales are concerned, it is observed that a general decrease in property prices has been experienced from the commencement of the SWC, as a result of the combination of factors such as construction pollution and catchment problems. While for the retail rental prices within the study scope, a contrasting uprising trend has been instead generally observed, attributed to the differences in the accessibility to the areas and the availability of business opportunities experienced in the focus area during the various stages of the project.

The empirical results reveal that cross-boundary cooperation in coordinating time of infrastructural project completion is exceptionally crucial. If the coordination of the infrastructures bridging the two sides of the borders are not coordinated well, the problem of SWC in the early stage of commissioning will happen again, causing the unavailability for areas connected to the border to enjoy the business opportunities, economic and spatial efficiency in the area. Also, the residential property prices may even be driven down by the cross-boundary infrastructure, which is considered to be strategic in fostering economic development and enhancing transport efficiency upon regional integration of the Pearl River Delta cities. Therefore, careful planning and regional coordination are needed to enhance the efficiency of the cross-boundary infrastructure, so as to achieve its objectives to facilitate economic growth, social harmony and environmental sustainability.