The train stops - the real estate value increases

Each additional train stop in Netanya and Rehovot increased real estate prices in these cities by an average of NIS 2,300 * according to a study conducted at the University of Haifa

A new study conducted in the Department of Economics at the University of Haifa found a direct connection between the increase in the frequency of train stops and the increase in real estate prices. "These results can be used as an index to examine the feasibility of additional investments in the railway services", noted researcher Ronit Yahav-Sharer.
The research conducted under the direction of Prof. Benjamin Bentel was conducted in Netanya and Rehovot, two cities located in the suburbs of the Tel Aviv metropolis and about 25 minutes away by train from Tel Aviv. The study examined the change in the frequency of train stops at stations in these cities and the change in real estate prices in the city in the years 1992-2002. Data regarding the train stops at the station were provided by Israel Railways and data regarding apartment prices were provided by brokerage offices. In total, the changes were measured in 2070 apartments in Netanya and 1389 apartments in Rehovot. To eliminate the effect of the index and inflation on apartment prices, the prices were compared to the shekel value in 2000.
Since the change in real estate value (increase or decrease) depends on many factors, Yahav-Sharer developed a model that took into account the set of factors that determine the value of real estate at any given time, so that it would be possible to check whether and what part of the increase in the average number of train stops. The findings showed a direct relationship between the increase in the number of stops at the stations and the apartment prices in these two cities. In Netanya, the average daily stops increased from 28 stops in 1992 to an average of 81 stops per day in 2002. According to the model developed by Yahav-Sharer, it appears that each additional stop of the train in Netanya is worth an additional NIS 2389 to the price of the apartment. In Rehovot, where the number of train stops increased from 10 stops in 1992 to an average of 70 stops per day in 2002, the model showed that each additional stop is worth NIS 2300.
"The increase in real estate prices in Netanya and Rehovot actually reflects the benefit of consumers from improvements in train services, beyond the immediate benefit of convenience and availability. The results of the study allow a cost-benefit analysis of increasing the number of daily stops against a possible benefit for the residents," said Yahav-Sharer.