How do transportation facilities affect nearby property price? : a case study of Tuen Ma line

Abstract

Transportation has always been among the most influential and vital factors in property prices. According to the Bid Rent Theory of Alonso, the closer a property is located to the central business district (CBD), the higher its price or rent. This is due to the increased accessibility and convenience of proximity to the CBD. As the distance from the CBD increases, transportation costs and time also rise, leading to decreased property prices in those areas. Living in properties located near major transportation hubs or with easy access to multiple modes of transportation can reduce the travel time to the CBD. Therefore, those properties tend to have higher prices than those with limited transportation options. The Tuen Ma Line (TML) is one of the newest railway lines in Hong Kong. The construction of the line provides an opportunity for me to study the relationship between transportation facilities and nearby property prices. TML is an important infrastructure project that enhances transportation connectivity and convenience for residents in the New Territories. The line reduces travel time and improves accessibility for residents living near the stations. This study constructs hedonic price models to study the impact of TML on private residential property prices near railway stations. The study used transaction records from 2000 to 2022 to compute the price models. The findings indicate that TML positively affected nearby private residential property prices. Furthermore, the study also suggested that the closer to the MTR station, the higher the property price increased. However, the price of the property directly on top of the MTR station is not the highest because transportation hubs also bring adverse effects.