Transport investment and house prices

The paper describes the use of hedonic analysis to examine the impact of the South Yorkshire Supertram on house prices in Sheffield. The approach was distinguished by the use of asking prices rather than transaction prices, the use of dummy variables to capture neighbourhood quality effects and the use of a GIS to calculate continuous distance variables. Compared with similar previous studies the equations performed well and identified, for the first time in a British context, a small, discrete transport induced price effect. Supertram initially depressed the prices of nearby houses but prices show signs of recovery. Further research is needed to examine the longer term impact of Supertram on the housing market.