Abstract
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.
Highlights
In recent decades, residential conditions have been a critical factor of the formation of sustainable cities [1]
The empirical analysis consists of two parts: the direct effects and the expectation effects of rail transit facilities on housing prices
We use a panel data model to assess the direct effect of rail transit facilities on housing prices
Summary
Residential conditions have been a critical factor of the formation of sustainable cities [1]. Vast price bubbles in real estate markets increase the risk of bubbles bursting, which may damage the sustainable urban development. Urban rail transit facilities play an important role in alleviating traffic pressures [2] and promoting sustainable urban development [3], which may expand city boundaries. It is of enormous interest to ask whether urban rapid rail transit affects housing prices. Following the institution of a series of economic stimuli (e.g., expansionary fiscal and monetary policies), China’s real estate market quickly recovered. Impacts of transit factors on real estate values have attracted broad interest from transportation researchers and policymakers around the world
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