How much does new transport infrastructure add to land values? Evidence from the bus rapid transit system in Sydney, Australia

Abstract

This paper examines the impact of a Bus Rapid Transit (BRT) system on residential housing prices in Sydney, Australia. A quasi experimental approach and a hedonic regression model are employed to identify the housing price uplift at three points in time: after announcement of the project, construction period, and after the opening of the BRT system. Catchment and control areas are selected from the property sales data to control for the potential external shock on house prices. The hedonic regression model takes account of the property and neighbourhood attributes which are expected to affect the property transaction price and thus identifies land value uplift from the BRT system. This research found that the sales price of residential properties within 400 m of BRT stops are significantly higher than those outside of the BRT service area after the opening of the BRT system in 2003. The research outcomes provide evidence for government sectors for planning future BRT systems and for quantifying the ability to raise financial funding for public transport improvement through the gain of land value uplift.