Diffusion or Polarization in Intercity Property Markets after the Completion of Intercity Metro Line

Abstract

As an important intercity commuting approach, the intercity metro line is expected to increase the housing choices of residents in core cities and then change the price difference between property markets in two connected cities. This study has investigated the influence of the Guangzhou–Foshan Metro Line and the related network on local residential property markets. Based on the property transaction records and point of interest (POI) location information, a significant polarization effect is detected in most regions in Guangzhou because of this metro line. However, a diffusion effect is also found only in the regions within 500 m from stations. The distance to stations is proven to be a crucial determinant for the polarization/ diffusion effect in property markets. For cross border regions, the city premium disappears in a sample region through which the Guangzhou–Foshan Line passes. By contrast, a large city premium persists in another sample region through which the line does not run. The intercity metro line only partially narrows the gap of property values in a few regions but enlarges the price difference in most regions between the two cities. City planners should be aware of the polarization effect by the intercity metro line network, especially for the excessive supply in property markets in noncore cities.