The impact of rail access on condominium prices in Hamburg

Abstract

Using hedonic price functions, we study the influence of access to public railway stations on the prices of surrounding condominiums in Hamburg, Germany. The study examines the influence of rail infrastructure on residential property prices, not only of individual lines, but for the entire rail network of a metropolitan region. We test the stability of the coefficients for different sets of control variables. The study also estimates public-transit-induced increases in tax revenues due to real estate price increases for a study area outside the United States. We control for spatial dependence and numerous variables correlated with the proximity of railway stations and show that access to the public transit system of the city of Hamburg is to be rated with price increases of up to 4.6%. Such premiums for higher-income neighbourhoods and for subterranean stations tend to be higher. The premiums calculated are significantly lower than average price premiums reported in previous studies, which were mostly based on much fewer variables that rail access might be correlated to.