The Impact of Bus Rapid Transit on Price Premium of Residential Properties

Tan, Kai Yuan (2025) The Impact of Bus Rapid Transit on Price Premium of Residential Properties. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

The public transportation system was one of the essential infrastructures supporting urban mobility in Malaysia. The Bus Rapid Transit (BRT) system in Bandar Sunway was purposefully built to alleviate local congestion. Additionally, the BRT shared similar characteristics with a rail transit system, operating on a specific express lane and enjoying benefits such as ease of deployment and lower investment costs compared to rail transit systems. Although the effects of rail transport on residential property values had been extensively studied, they did not cover the influence of BRT on transit accessibility premiums in the Malaysian context. Understanding the response of the residential market to BRT could provide indications for stakeholders in formulating appropriate strategies or policies. For instance, property investors could gain a better understanding of the Return on Investment for Transit-Oriented Development. The transit accessibility premiums of BRT stations were assessed using a hedonic approach, integrated with Multiple Linear Regression Analysis (MRA) and Geographically Weighted Regression Analysis (GWR). The data for transacted properties from 2010 to 2022, including property attributes were collected and utilised for model calibration. This study revealed that overall residential prices tended to increase by 10.36% after the announcement for BRT in Bandar Sunway. Upon the completion of BRT, residential prices appreciated by 20.03% for every kilometer towards the BRT station. The local effects of BRT stations also indicated that transit accessibility premiums showed significance in areas close to shopping centers. Keywords: Bus Rapid Transit, Hedonic Approach, Transit accessibility premiums, Local EffectsThe public transportation system was one of the essential infrastructures supporting urban mobility in Malaysia. The Bus Rapid Transit (BRT) system in Bandar Sunway was purposefully built to alleviate local congestion. Additionally, the BRT shared similar characteristics with a rail transit system, operating on a specific express lane and enjoying benefits such as ease of deployment and lower investment costs compared to rail transit systems. Although the effects of rail transport on residential property values had been extensively studied, they did not cover the influence of BRT on transit accessibility premiums in the Malaysian context. Understanding the response of the residential market to BRT could provide indications for stakeholders in formulating appropriate strategies or policies. For instance, property investors could gain a better understanding of the Return on Investment for Transit-Oriented Development. The transit accessibility premiums of BRT stations were assessed using a hedonic approach, integrated with Multiple Linear Regression Analysis (MRA) and Geographically Weighted Regression Analysis (GWR). The data for transacted properties from 2010 to 2022, including property attributes were collected and utilised for model calibration. This study revealed that overall residential prices tended to increase by 10.36% after the announcement for BRT in Bandar Sunway. Upon the completion of BRT, residential prices appreciated by 20.03% for every kilometer towards the BRT station. The local effects of BRT stations also indicated that transit accessibility premiums showed significance in areas close to shopping centers. Keywords: Bus Rapid Transit, Hedonic Approach, Transit accessibility premiums, Local Effects