The Price of Proximity: How Bengaluru's Metro Affects Residential Property Values

Ballal, Shikha and Tripathi, Sabyasachi (2025): The Price of Proximity: How Bengaluru's Metro Affects Residential Property Values.

Abstract

Transit networks significantly influence city evolution, with mass rapid transit systems enhancing access to jobs, housing, and infrastructure. Indian Government is promoting metro rail projects to strengthen public transport, and many cities are developing their metro rail corridors, making understanding their impact crucial in the Indian context. This study investigates the impact of the mass rapid transit system (Namma Metro) on residential property values in Bengaluru, India. It investigates the impact of recently operational and existing metro lines on property values in different neighborhoods across Bengaluru. The research uses a mixed-methods approach, combining quantitative data analysis with hedonic price regression based on household surveys. The regression results show that proximity to metro stations and higher income levels lead to significant housing value increases. The dense areas and longer metro operation years contribute to higher property values, while the distance from the city centre and higher metro connection costs negatively impact property values. The findings have significant implications for urban planning and policy decisions. It helps understand how building metro stations leads to real estate development and value creation in the vicinity of the metro corridor and how transit-oriented development policies around metro stations can support land value capture.

• Item Type: MPRA Paper
• Language: English
• Keywords: Metro rail, transport systems, distance, housing value, Bengaluru, India
• Subjects: L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L90 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R32 - Other Spatial Production and Pricing Analysis

References

Agostini, C. A., & Palmucci, G. A. (2008). The anticipated capitalisation effect of a new metro line on housing prices. Fiscal studies, 29(2), 233-256.

Aliyu, A. A., Keffi, M. A., & Anosike, D. A. Reaction of Adjoining Housing Prices to Newly Constructed Sub-Way Lines: Evidence from Empirical Literature.

Alonso, W. (1964). Location and land use: Toward a general theory of land rent. Harvard University Press.

Xing-lei, G., Qian, Z., Zhen-lei, Y., Zhong-hui, L., & Chang-zheng, S. (2023). Research on the impact of China’s urban rail transit on economic growth: Based on PSM-DID model. Frontiers in Environmental Science, 11, 1082567.

Anantsuksomsri, S., & Tontisirin, N. (2015). The impacts of mass transit improvements on residential land development values: Evidence from the Bangkok Metropolitan Region. Urban Policy and Research, 33(2), 195-216.

Bajic, V. (1983). The effects of a new subway line on housing prices in metropolitan Toronto. Urban studies, 20(2), 147-158.

Bishwas et al. (2023). Impact of Namma Metro on Traffic Author. Iconic Research and Engineering Journals, Volume 6 Issue 10.

Boarnet, M. G., Houston, D., & Spears, S. (2013). The Exposition Light Rail Line Study. The Haynes Foundation.

Camins-Esakov, J., & Vandegrift, D. (2018). Impact of a light rail extension on residential property values. Research in Transportation Economics, 67, 11-18.

Cervero, R. (2013). Linking urban transport and land use in developing countries. Journal of transport and land use, 6(1), 7-24.

Chun-Chang, L., Chi-Ming, L., & Hui-Chuan, H. (2020). The impact of a mass rapid transit system on neighborhood housing prices: an application of difference-in-difference and spatial econometrics. Real Estate Management and Valuation, 28(1), 28-40.

de Andrade, M. O., & Maia, M. L. A. (2009). The Recife Metro–The impact on urban development after 20 years. Flux, 75(1), 57-68.

Debrezion, G., Pels, E., & Rietveld, P. (2007). The impact of railway stations on residential and commercial property value: A meta-analysis. The journal of real estate finance and economics, 35, 161-180.

Duncan, M. (2011). The impact of transit-oriented development on housing prices in San Diego, CA. Urban studies, 48(1), 101-127.

Hansen, W. G. (1959). How accessibility shapes land use. Journal of the American Institute of planners, 25(2), 73-76.

Hemasree, R., & Subramanian, C. V. (2022). Influences and Impressions of Metro Rail Transit Systems in Urban Spaces: A Review. Civil Engineering and Architecture, 10(7).

Hultin, C. E. (1971). Philadelphia–Lindenwold High-Speed Line Surveys. Journal of the Surveying and Mapping Division, 97(1), 7-12.

Jiang, Y., Gu, P., Cao, Z., & Chen, Y. (2020). Impact of transit-oriented development on residential property values around urban rail stations. Transportation Research Record, 2674(4), 362-372.

Keeler, Z. T., & Stephens, H. M. (2023). The capitalization of metro rail access in urban housing markets. Real Estate Economics, 51(3), 686-720.

Kurle, A. P. P., & Sohani, A. A. (2022). ASSESSING THE IMPACT OF PUNE METRO ON REAL ESTATE MARKET.

Li, Y., Chen, Z., & Wang, P. (2020). Impact of high-speed rail on urban economic efficiency in China. Transport Policy, 97, 220-231.

Malhotra, G., Rastogi, A., & Paul, D. V. K. (2020). Impact of metro Rail Transit System on Residential Properties. International journal of Creative Research Thoughts (IJRCT), 8(5), 1534-1540.

Maranzana, F. E. (1963). On the location of supply points to minimize transportation costs. IBM Systems Journal, 2(2), 129-135.

Martínez, L. M., & Viegas, J. M. (2009). Effects of transportation accessibility on residential property values: Hedonic Price Model in the Lisbon, Portugal, metropolitan area. Transportation Research Record, 2115(1), 127-137.

Mohammad, S. I., Graham, D. J., Melo, P. C., & Anderson, R. J. (2013). A meta-analysis of the impact of rail projects on land and property values. Transportation Research Part A: Policy and Practice, 50, 158-170.

Nallathiga, R. (2006). An evaluation of the impact of density regulation on land markets in Mumbai. International Real Estate Review, 9(1), 132-152.

National Transit Oriented Development (TOD) Policy 2017, Government of India: Ministry of Housing and Urban Poverty Alleviation, Government of India.

Pan, H., & Zhang, M. (2008). Rail transit impacts on land use: Evidence from Shanghai, China. Transportation Research Record, 2048(1), 16-25.

Pucher, J., Peng, Z. R., Mittal, N., Zhu, Y., & Korattyswaroopam, N. (2007). Urban transport trends and policies in China and India: impacts of rapid economic growth. Transport reviews, 27(4), 379-410.

Ruan, L. F., & Yin, J. P. (2014). Impact of urban rail transit on residential property values in Hangzhou. Applied Mechanics and Materials, 580, 1306-1310.

Sekar, S. P., & Karthigeyan, D. (2009). A study on the development trends along the proposed Chennai metro rail corridor. Inst. Town Plann. J, 6(4), 41-60.

Sharma, R., & Newman, P. (2018). Does urban rail increase land value in emerging cities? Value uplift from Bangalore Metro. Transportation Research Part A: Policy and Practice, 117, 70-86.

Singhal, S., & Tyagi, Y. (2021). Analyzing the Influence of Metro Stations on Commercial Property Values in Delhi: A Hedonic Approach. Real Estate Management and Valuation, 29(4), 10-22.

Suzuki, H., Cervero, R., & Iuchi, K. (2013). Transforming cities with transit: Transit and land-use integration for sustainable urban development. World Bank Publications.

Swamy, H. (2008). Impact of Delhi metro on real estate. IUT India

Tan, R., He, Q., Zhou, K., & Xie, P. (2019). The effect of new metro stations on local land use and housing prices: The case of Wuhan, China. Journal of Transport Geography, 79, 102488.

Tiwari, P., Parikh, K., & Parikh, J. (1999). Effective housing demand in Mumbai (Bombay) metropolitan region. Urban Studies, 36(10), 1783-1809.

Wagh, S., & Sonar, P. Analysing the Impact of Pune Metro on Real Estate Values using Arc GIS.

Wey, W. M., & Chang, Y. H. (2009). A comparative location study for the joint development station of a mass rapid transit system: a case in Taichung City in Taiwan. Environment and Planning B: Planning and Design, 36(4), 573-587.

Xu, T., Zhang, M., & Aditjandra, P. T. (2016). The impact of urban rail transit on commercial property value: New evidence from Wuhan, China. Transportation Research Part A: Policy and Practice, 91, 223-235.

Zhao, Z. J., & Larson, K. (2011). Special assessments as a value capture strategy for public transit finance. Public Works Management & Policy, 16(4), 320-340.