NILS Working paper no 181. Modelling house prices across Sydney with estimates for access, property size, public transport, urban density and crime
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This paper examines the structure of house prices across the city, in this case Sydney, as an aid to urban development strategy and in particular to determine the potentially positive effects of public transport and negative effects of residential density on property prices. We model median house prices in 626 suburbs and achieve a high level of explanation. Distances from the CBD and from the coast are dominant factors in explaining house prices in Sydney. Predictably house and lot size are also highly significant factors. On the other hand a high propensity for violent crime significantly reduces property values. Over the whole city distance to rail station is not a statistically significant variable, but in suburb groups that are poorly served by other modes, median house prices fall significantly with increased distances to station. We found a similar but weaker result for access to high frequency buses. Contrary to expectation we found that higher density is marginally associated with higher median prices. However as the density variable is correlated (negatively) with median land area and, to a lesser extent, with distance to CBD, we would be cautious about concluding that density has no negative effect on house prices.