How can we identify the different components affecting residential property values before and after the announcement, construction and operation of transport projects? A case study in Sydney, Australia

Abstract

New public transport projects are expensive and long lived and their financing often is a challenge. As a result, cities are often concerned to understand the economic impacts induced by these new public transport projects, and in particular whether increases in land value which may have followed the investment can be ‘captured’ as a potential source of finance. However, land value uplift might occur at different stages of a project and might not be only due to the improved accessibility of the project. This study focusses on understanding the complexity of value uplift on residential properties resulting from three public transport projects in Sydney, Australia: two light rail projects and one heavy rail. Multilevel models are presented comparing the affected or ‘catchment’ areas of the projects with what is referred to as a ‘control area’ where the investment has not had an impact. Four different methods are used to define these control areas. The results show that, despite controlling for other attributes, such as property and neighbourhood, and using different methodologies for the control areas, there are still quite different results for the amount of uplift brought about by the different investments. What is however clear from the results is that increases to land value can come from the early stages of the project (i.e., during announcement and construction) when the accessibility improvements have not been realised.