Evaluating the impact of Metro line no. 1 on property prices in Ho Chi Minh city by using GIS-based Hedonic pricing model

Abstract

Transportation infrastructure projects play a crucial role in promoting economic development, improving quality of life, and enhancing social welfare, particularly in urban areas. In line with this trend, Metro Line No. 1 Ben Thanh - Suoi Tien is expected to significantly transform travel behavior, contribute to the restructuring of urban space, and increase property values along its corridor. This study aims to evaluate the impact of Metro Line No. 1 on residential property values in Ho Chi Minh City, in the context of its commercial operation scheduled for December 2024. A dataset of 356 observations was collected from online real estate platforms within a 1.5 km buffer along the metro line. This paper employs a semi-logarithmic Hedonic Pricing Model combined with Geographic Information System applications to calculate spatial variables. The results indicate that the model demonstrates a relatively good explanatory power, with approximately 62% of the variation in property prices explained by the independent variables. Structural characteristics, neighborhood amenities, and accessibility to public transportation have positive effects on property values, while distance-related variables exhibit negative effects. Notably, property values increase significantly as the distance to metro stations decreases, confirming the capitalization effect of Metro Line No. 1 on the urban real estate market of Ho Chi Minh City.