The impact on neighbourhood residential property valuations of a newly proposed public transport project: The Sydney Northwest Metro case study

The development of new and upgraded transport infrastructure projects are driving economic benefits for business, the environment and society. Major transport projects can fundamentally reshape the very fabric of urban development. However, they are also incredibly expensive to build and can represent a significant burden on the public purse. A vexed question is how the broader benefit of improved transport infrastructure in operation might usefully be leveraged to contribute to the capital investment cost. The Transit-Oriented Development impact of new transportation infrastructure on the value of local property is gaining increasing attention as a potential source of capital contribution. This study investigates the extent of value uplift in property brought about by the announcement and construction of a major transport infrastructure development in Sydney, Australia. A Hedonic Price Model approach is used to assess data on the market valuation of nearby properties and relevant Census data over two distinct project stages: project announcement (2008–2012), and project construction (2013–2019). Findings of the case study show that the impact of rail transit on property prices is significant, but are generally negative at the announcement stage and positive at the construction stage. At the construction stage, residential prices rose an average of 0.037% for every 1% reduction in the distance to the nearest metro station. Of the three models considered for the Hedonic Price Model the Log-linear model (elastic model) has been shown to perform best in representing the relationships in this particular case.