Impact of Bus Rapid Transit and Metro Rail on Property Values in Guangzhou, China

Abstract

An effective transport system can increase access and raise land values; thus, governments should be able to capture part of this price premium for transit access. These revenues could be used to fund further investments in public transit or other projects. Reliable measures of the price premium for transit access can help guide governments in setting policies to capture value. Guangzhou, China, has an extensive metro rail system and the highest-capacity bus rapid transit line in China. This study examines the effects of these two public transport systems on the prices of apartments in the city by using a unique set of data collected from a mainstream Chinese real estate website. Ordinary least squares, spatial regression models, and quantile hedonic regression were used to estimate the price premium for transit access. The findings suggest that proximity to the metro and the bus rapid transit line has a substantial and statistically significant effect on apartment prices that varies by district and the amenities provided.

The Inflated Valuation Problem in Valencia, Spain, and Implications for Firm Size

“…Just as Salon et al (2014) found in China, the existence of a tram service in the towns surrounding the city influences the price of dwellings. The price of the housing located at a distance from a tram stop shorter than 1 km increases by 10%, while those located less than 2 km from a tram stop increase by 5% compared to other dwellings located in towns of the same province.…”

Understanding the impact of Bus Rapid Transit (BRT) on property values - a case study of Brisbane, Australia

“…Many empirical studies have been conducted to estimate and measure the amount of land value uplift (LVU) attributable to BRT access. Some academic researchers find evidence of land and property value appreciation attributed to BRT (Cervero & Kang, 2011;; however, others have reported no land value increases, or in some cases negative effects (Salon et al, 2014;Targa, 2003;Ulloa, 2015;Zhang & Liu, 2015). Why do estimates of BRT impacts vary across these studies?…”

“…In Seoul, Korea, one of the densest and most congested Asian cities, LVU that were up to about 10.0% were estimated for residential lands and more than 25% for retail lands and other non-residential uses (Cervero & Kang, 2011). In China, the newly opened Guangzhou (China) BRT also found value-uplift effects up to 2.1% on properties that vary by district and the amenities provided (Salon et al, 2014). However, an empirical study in Beijing, another densely populated Asian city, reports that BRT (Beijing Line 1 and Southern Axis BRT) does not confer statistically significant effects on residential land value (Ma et al, 2013;.…”

“…However, in some case studies, researchers use assessor or asking prices as a proxy for the actual transaction prices, due to data limitations (see Targa, 2003;Rodriguez and Targa, 2004;Perdomo et al, 2007;Rodriguez and Mojica, 2009;Perk and Catala, 2009;Salon et al, 2014). In our meta-analysis, the effect of using assessor and asking prices, as opposed to purchase price, was tested.…”

“…Researchers and practitioners have shown interest in the value BRT can add to urban real estate prices. LVC is increasingly being seen as a potential way to finance transport projects given widespread government fiscal restraint (Mathur & Smith, 2013 (Salon, Wu, & Shewmake, 2014;Targa, 2003;Ulloa, 2015;Zhang & Liu, 2015). Why do estimates of BRT impacts vary across these studies?…”