House prices: Can commuting times raise or drag prices down?Research carried out at Victoria University shows that the commuting distance from Wellington City influences house prices in the region.

Dr Toby Daglish, Research Director at the New Zealand Institute for the Study of Competition and Regulation (ISCR), says a recent study into decisions made by Wellington commuters shows that travel times have a significant effect on house prices in Wellington and Lower Hutt.

“Taking into account factors such as the size of a house and its age, we found that an extra minute by public transport to Cuba Mall reduced the value of a house by $6,700. So a house that was 10 minutes further from town was $67,000 cheaper, all other things being equal,” says Dr Daglish.

The research focuses on commuting decisions made by Wellingtonians, the intensity of car ownership and how these factors impact on house prices. It is a collaborative project between Drs Toby Daglish, Yigit Saglam and Mairead de Roiste. 

The project has benefited from the employment of a Summer Scholarship student jointly funded by Victoria University and Wellington City Council.

Dr. Daglish says researchers used data from the NZ Household Travel Survey, which is prepared by the Ministry of Transport (MoT), to gauge nationwide decisions about car ownership and transport modes.

The data analyses where people live, where they work and how they commute between work and home locations. It explores which characteristics make a commuter more likely to choose a particular commuting mode and level of car ownership.

“Our model provides some insight into the types of things that could stimulate a change in how people commute, such as the drop needed in public transport prices and/or commute times in order for commuters to stop driving to work,” Dr. Daglish adds.