An empirical study of the effect of the rail plus property model on residential property prices : a case study of Kowloon station

Abstract

Hong Kong, one of the most densely populated cities in the world, faces significant challenges in urban planning due to limited land supply and high population density. While railway companies in other countries experience losses in operation, Hong Kong generates significant profits with relatively low price of fares compared with the metro systems in other developed cities. One of the keys to become significantly profitable is the approach of a unique business model, Rail plus Property (R+P) model, adopted by the Mass Transit Railway Corporation Limited (MTRC). This study aims to provide a comprehensive analysis of the effects of R+P model on residential property prices at Kowloon Station. By examining the impacts of R+P model, the dissertation provides insights and recommendations of the model for sustainable development. Moreover, a mixed-methods approach is adopted in this study. A quantitative study using regression analysis and hedonic pricing models was conducted and questionnaires were collected to gather insights from various stakeholders. The hypotheses and model indicate that price premiums persist throughout the entire development phase of the R+P model, including the announcement phase, the construction phase, and the operational phase. Moreover, the R+P projects generate significant housing market benefits in the vicinity. Besides, the data from questionnaires shows that there is a heavy reliance on railway transportation, and proximity and connectivity to MTR stations are prioritized when purchasing or renting a property. Lastly, various recommendations were proposed for optimizing the R+P model for sustainable development, including transit-pedestrian integration through infrastructure upgrades, implementation of inclusionary zoning policies for affordable housing options, and additional environmentally sustainable features.