Transport infrastructure, accessibility, and spillover effects: An empirical analysis of the Portuguese real estate market from 2000 to 2018

Abstract

Modelling real estate valuation has for long been established as a central research area within urban and regional economics. Several studies have identified the main factors that model real estate value. Accessibility is one of those factors. This article describes the influence of transportation infrastructure on property valuations, using the mean value of real estate transactions in NUTS-III administrative regions of mainland Portugal as a proxy for valuation, based on an analysis of the period between 2000 and 2018. This study expands the existing body of knowledge by explicitly considering spillover effects from investing in infrastructure. A cross-regressive spatial model is developed with typical investment and infrastructure stock variables and more complex accessibility indicators. These indicators express different levels of accessibility within regions and are influenced by the development of both road and railway infrastructure. The results show evidence of spatial autocorrelation between real estate values, confirming that the positioning of each region is crucial for the development of the market. However, the results yielded by the cross-regression model are not consistent across all 23 regions, showing both positive and negative impacts of road infrastructure investment on real estate values.