The Impact of Railway Stations on Residential and Commercial Property Value: A Meta Analysis

Abstract

Railway stations function as nodes in transport networks and places in an urban environment. They have accessibility and environmental impacts, which contribute to property value. The literature on the effects of railway stations on property value is mixed in its finding in respect to the impact magnitude and direction, ranging from a negative to an insignificant or a positive impact. This paper attempts to explain the variation in the findings by meta-analytical procedures. Generally the variations are attributed to the nature of data, particular spatial characteristics, temporal effects and methodology. Railway station proximity is addressed from two spatial considerations: a local station effect measuring the effect for properties with in 1/4 mile range and a global station effect measuring the effect of coming 250 m closer to the station. We find that the effect of railway stations on commercial property value mainly takes place at short distances. Commercial properties within 1/4 mile rang are 12.2% more expensive than residential properties. Where the price gap between the railway station zone and the rest is about 4.2% for the average residence, it is about 16.4% for the average commercial property. At longer distances the effect on residential property values dominate. We find that for every 250 m a residence is located closer to a station its price is 2.3% higher than commercial properties. Commuter railway stations have a consistently higher positive impact on the property value compared to light and heavy railway/Metro stations. The inclusion of other accessibility variables (such as highways) in the models reduces the level of reported railway station impact.

The effects of highway development on housing prices

“…Whereas most of these studies focus exclusively on the positive effects of improved accessibility on housing prices, other studies emphasize that both positive and negative externalities may result from highway development, and these may affect residential preferences (Debrezion et al 2007;Iacono and Levinson 2011;Martínez and Viegas 2009;Tillema et al 2012). Moreover, depending on the exposure levels to different externalities, house prices in different geographic areas may change differently due to the effects caused by the new transportation infrastructure development (Smersh and Smith 2000).…”

Modelling transport and real-estate values interactions in urban systems

“…Most of these studies have concentrated on the relationship between real estate prices and access to rail transport with very varied results (Pagliara and Papa, 2011). Debrezion et al (2007) carried out a meta-analysis with more than 50 hedonic studies to explain the variability in the results of the research. The authors controlled the influence of variables like the type of property being modelled, the type of station or the functional form chosen for the hedonic model.…”

“…Armstrong and Rodríguez (2006) point out three of them: the problem of omitting variables, the problem of choosing the functional form and the problem of spatial autocorrelation in sample observations. The omission of theoretically relevant variables may, as is well known, bias the estimated parameters (Gujarati and Porter, 2009) and the problems detected by Debrezion et al (2007) in a great many models of omitting the accessibility provided by other modes of transport is a clear example of this. The problem of specifying the functional form is common to all hedonic studies.…”

Price escalation of area surrounding properties along metro line using GIS, A comparative study of Mumbai metro and proposed Pune metro

“…Their higher service coverage adds to the attraction of the area surrounding the stations. This will affect the value of properties around commuter railway stations [3]. D. When any rail transit system is introduced in a city, it is a general perception of people that it will have certain positive effect on property value.…”