Assessment of changes in the market value of residential real estate in the area of the commissioned transport interchange of the urban toll road

Abstract

The purpose of this research is to assess the impact of the commissioned toll road running through the city’s residential areas on the market value of residential real estate. The article presents a review of non-traditional methods for assessing real estate value, mainly in foreign publications. The Western High-Speed Diameter (WHSD) is the most significant transport and infrastructure project of the current decade for St. Petersburg. The most inaccessible part of the city on Vasilievsky Island was analyzed, as the example of new and secondary real estate value changes, were examined from August 2015 to December 2017, by the time when the new transport interchange of WHSD in the western part of the island was constructed and put into commission. For the study, the authors used the data of the Real Estate Bulletin of St. Petersburg at the end of 2015 and 2017, the data of the cadastral assessment of residential real estate of St. Petersburg of 01.01.2015 and 01.01.2018. Main research method is the study of two-dimensional and conditional distributions of random values of bid prices and cadastral values, which allows obtaining estimates of the market value of the real estate that has passed cadastral registration, and estimates of growth rates. The comparison of prices of offers with cadastral values applied in the article, with a simple and natural speculation of logarithmically normal distribution, allows us to propose a method of assessing the market value for any property, even if the information about it is not available in the market data. The obtained numerical results showed a rise in the cost of a significant part of the mass-market for the study period up to 18% without discount on the auction, and up to 9% taking into account the discount on the auction. It turned out to be slightly higher than the general change in the prices of proposals that can be found in advertising publications. A significant change (from 50% to 73%) was found in business-class properties, located in the area with significantly changed species characteristics and improved transport accessibility, in the immediate vicinity of the exit from WHSD. The results, indicating the growth of market value, allowed us to make a general conclusion about the changes in the attractiveness of the area for different segments of the population of the city: both for the mobile middle class, focused on the mass-market, and for buyers of the premium segment, having increased requirements for the real estate. The authors believe that the growth of the market value of real estate in the area of transport interchanges of modern infrastructure projects could be higher in other macroeconomic conditions. At present, the effective demand of the population is obviously not sufficient.