COVID-19 effects on property prices around metro stations: varied responses based on station types

Abstract

Numerous studies have explored the capitalization of property values due to convenient transportation. However, the outbreak of COVID-19 may diminish this effect. Furthermore, limited research has delved into the spatial heterogeneity of the impact of COVID-19 on the property market. Consequently, this study focused on Wuhan, one of the first cities in the world to experience the pandemic outbreak. We developed a series of DID Hedonic Price models to analyze the temporal heterogeneity of COVID-19's impact on property prices and used an EM clustering model to categorize metro stations for a more detailed examination of the spatial heterogeneity of COVID-19's impact on the implicit price of properties around different types of metro stations. The study reveals that COVID-19 has, on the whole, reduced the implicit price of properties around metro stations in Wuhan. However, this impact exhibits a lag effect, becoming evident only after six months of the lifting of lockdown. Additionally, this impact demonstrates spatial heterogeneity, as COVID-19 has reduced the implicit price of properties around 'employment-residential mismatched' metro stations, 'residential-oriented' metro stations, 'employment-oriented' metro stations, and 'employment-comprehensive' metro stations while increasing the implicit price of properties around 'residential-comprehensive' metro stations and comprehensive stations. Finally, our research indicates that, for cities severely impacted by the pandemic, such as Wuhan, the impact of COVID-19 on the implicit price of properties around metro stations may persist for an extended period.