House prices and airport proximity: Are they valued equally?

Abstract

This study contributes to understanding the link between the housing market, airport location proximity examining the entirety of the price distribution. The research investigates this association across four key urban areas within New Zealand proximal to an international airport - Auckland, Wellington, Christchurch, and Queenstown. Applying hedonic and Quantile regression, the analysis reveals that proximity to airports on house prices has a heterogeneous pricing effect. The regression analysis exhibits distance to comprise a positive effect within Auckland and Christchurch, whereas in Wellington and Queenstown the pricing effect is negative. The quantile regression findings further revealed differences between lower and higher priced properties value, given distance and proximity to airports within each city region. Auckland exhibits a positive distance decay effect moving from the lowest to the highest quantiles which diminishes and becomes negative illustrating that the highest priced properties consider closer proximity to airports comprise a dis-amenity effect on property value, alternatively, the lowest priced properties perceive adjacency to the airport as a positive amenity. Wellington also displays higher priced housing to exhibit much larger negative effects with proximity to the airport than lower priced housing. The findings show that whilst there is a negative impact for proximity to airport this is more pronounced for higher priced properties relative to lower priced properties. The Christchurch region reveals contrasting findings showing there to be a higher positive pricing effect for higher priced housing which gradually decreases when moving down the quantiles. With respect to Queenstown, the findings show a nominal but positive pricing effect for lower priced housing with a negative effect for the highest priced properties.