Spatial effect of lake landscape on housing price: A case study of the West Lake in Hangzhou, China

• This paper examines the spatial effects of urban lake landscape on housing prices in Hangzhou, China.
• Spatial hedonic price models are developed to eliminate the spatial dependence of housing price.
• The West Lake has a significant positive external effect on housing prices.
• The amenity effect of the West Lake exhibits the directional and distance heterogeneities.

Urban lakes have attracted the attention of scholars because of their important landscape ecological value and significant impact on housing prices. This paper considers the West Lake in Hangzhou, China as an example, and uses the data of 649 housing communities in 2011 to establish a traditional hedonic price model. This model is improved by spatial regression techniques, to empirically analyze the spatial effect of the urban lake on housing price from two ways of the direction and distance heterogeneity. Results show that the West Lake has a significant positive external effect on housing prices. The housing price will drop by 0.159% as the distance to the West Lake increases by 1%. The amenity effect of the West Lake on housing prices exhibits the directional and distance heterogeneities. The average spatial effect distance is 3.98 km, and the price elasticity of the West Lake shows a significant difference in different directions. The spatial sensitivity of the housing price exhibits a slowly increasing trend after a sharp decrease as the distance to the West Lake increased.