Spatial effect of river landscape on housing price: An empirical study on the Grand Canal in Hangzhou, China

Urban landscape has an implicit amenity value and provides sites of leisure and entertainment for residents. Evaluating the external effects of landscape variables on property prices has become an important issue for scholars. This study regards the Grand Canal as an example, constructs hedonic price and spatial econometric models with the housing market data of Hangzhou in 2015, and empirically analyzes the spatial effects of waterscape on housing prices. The accessibility of the Grand Canal significantly affects housing price. Specifically, every 1% increase in the distance of the Grand Canal to a community will result in a 0.016% decrease in housing price. The difference-in-difference method reveals that the effects of the Grand Canal on property price demonstrate the distance heterogeneity and regional heterogeneity. The Grand Canal also exerts double effects on adjacent housing prices, and the negative effect is smaller than the positive effect within 1.5 km from the canal. The comparison of multiple models in this study also reveals that spatial econometric models can optimize traditional hedonic price models to obtain highly robust results. These findings can help the government establish necessary policies.